When buyers think of making a home offer, and sellers think of receiving a home offer, price is the first thing that comes to mind. However, there are many parts of a home offer and the price is only one piece of the puzzle. Some of the other terms included in the offer can make a difference of thousands of dollars.
There is no set rule on where to begin negotiations when making a home offer. Many people believe that they should offer less than they are willing to pay to leave room for negotiations.
While, this can be true in some cases there are some times when this is not the best strategy. It is important to look at the specifics of the situation.
For example, in a seller’s market when there are multiple buyers interested in a house, coming in with a low offer could mean you lose the house without a chance to negotiate.
The situation can differ slightly from state to state, but for the majority, when you make an offer you will complete an offer sheet that will include all the terms of the deal. Your agent will present the offer to the seller and their agent. They can then decide to accept, decline or counter the offer.
During the home offer phase counteroffers can go back and forth several times before a final decision is reached. Once you make an offer it’s important that you stay easily accessible so as to know how the sellers are responding.
Most offers include contingencies on several inspections. There are inspections to check the integrity of the home and to see if past repairs were done correctly. Inspectors also check for potential problems to avoid the buyer being caught off guard by costly problems in the future.
When a mortgage is being obtained for the property the lender will require an appraisal to be conducted on the property. The lender wants to ensure they are not lending more money for the purchase of the home then what the property is worth. Buyers can choose to have a survey conducted to determine where the property lines are located.
When inspections are being completed the buyer should be at the property as well. This is a good chance for them to become familiar with the property, any potential problems and to get their questions answered.
While these are the major terms involved in an offer, there are also others such as asking for a specific closing date. Some buyers make their offer contingent on the sale of their current home and others make it contingent on being able to get to the closing table and taking possession of the home quickly.
Carefully consider each term of your home offer. Understand the details of what you are looking to do depending on the back and forth of the home offer negotiation process. Being prepared with your game plan will help you to determine the correct course of action should issues come up.