Home Buying Steps: Making an Offer
So you found the perfect home, a beautiful three-bedroom in a peaceful neighborhood that (alas!) fits your budget. And now you’re pumped with so much excitement that you can’t wait to get through the next step of acquisition: making an offer.
But is it that easy?
If you’re lucky to be the only one interested in the property, making an offer could be less intimidating. Having to participate in a bidding war is a common cause of headache for many buyers, especially in today’s market of low housing inventory.
Still, knowing what’s up ahead can help you prepare for the what-could-be’s and allow you to create a strategic plan that would lead to the best conclusion on your end.
This article, thus, gives you an overview of the making-an-offer process. Although not the SOP, enlisting professional help along the way is always a smart tactic.
Draft and Forward the Initial Offer
Draft an offer, preferably with the help of your attorney and/or your agent. Your agent will be more inclined to help you with how much you should put forward in the initial offer based on current trends in the market, among other factors.
If you are not a cash buyer and need financing to pay for the home, it is wiser to get pre-approved for the loan first as this will assure the lender that you are serious on the offer.
Of there are multiple interests on the property, you might have to structure your offer more strategically to help convince the seller that your deal is the best from the flock.
Wait for the Seller’s Response
Included in your offer is a deadline in which the seller is required to respond. It could be an agreement, a rejection, or a counter-offer. How long the deadline should be set depends on how aggressive your offer is or how strong is the demand on the property.
If there’s a Counter-Offer, Negotiate
Do not expect the negotiation phase to be done in a single round. Depending on your interest on the property and the seller’s own terms, you may have to go with extra patience and jump through a few hoops to settle on a deal.
These counter-offers may range from a demand in a higher purchase price, or more down payment, etc. Whatever the demand may be, always know your limits and how much you are willing to compensate or sacrifice to get the deal.
If the demands get way off, be prepared to walk away. Work closely with your agent who represents you to come up with the most appeasing plans.
If Accepted, Proceed to Signing
If both parties reach a mutual agreement on a certain term, then all is good and now, you can proceed to the signing of the contract. At this stage, you and the seller are now obliged to complete the deal, unless some contingencies are not met.
If Rejected, Sack Up and Move Along
It may be disheartening, but the market works like that and the best thing you can do is not to lose heart.
Expect to have multiple rivals for a single property in today’s climate. Available housing is scarceand the rising interest rates are pushing people to buybefore the rates spike up. If you get a rejection, take it as a sport and shift back your focus to the job at hand. Who knows, there’s always the possibility of ending up with a better deal.
To the determined, making an offer is always a challenge than an obstacle. Keep your spirits up. With adequate planning and with the right people, there’s good reason to hope for a good conclusion.