 Making an offer on a house
The search is almost over. You’ve looked at dozens of houses and think you may have found your new home. Now it’s time to make an offer, but you’re not sure what to do next.
If you’re working with a real estate agent, they will do most of the work for you, but will they really get you the best deal? If you do your homework, you can make sure that the price you pay is the best possible price for that property.
Deciding how much to offer
Before you make an offer you must determine the right price and consider what (if any) contingencies you will be adding.
You should consider that the price the seller is offering the house for is just a starting point… a place to begin the negotiation process. You should consider the following points when determining
The advertised price of a house is just a starting point. It's up to you to decide how much the house is really worth, based on such factors as:
- What have similar houses in that area sold for recently
- What is the aesthetic condition of the house
- How is the real estate market in that specific area? Are houses selling quickly?
- Do you have a sense that the seller wants to move the house quickly?
- What condition the house is in (roof, plumbing, foundation). If possible, it is always a good idea to get an inspection done before making an offer.
- After making an honest and careful assessment of your budget, how much can you really afford?
Once you have spent some time giving careful consideration to all these factors, you might decide to give an offer that is considerable less, or in some cases more than the sellers asking price.
Adding Contingencies to Your Offer
Almost every offer I have ever seen contained certain contingencies. A contingency is something that must happen within a specific timeframe or the deal won’t be considered final. An example of this might be that your offer might be contingent upon whether or not your financing comes through or whether your other house sells. A contingency is not always time based. Sometimes it is based upon whether certain conditions have been met such as passing an inspection or making a repair to the property.
Counter offers
The seller reserves the right to accept or decline your offer. If your initial offer is declined, it may be because they have received higher offers or feels that your offer is too low.
If your offer is too low, they may reject it outright. However, in most cases they will respond with a written counter offer, making changes to some or all of the terms you laid out in the original offer.
Once the counter offer is presented, you have the opportunity to accept it, present another counter offer or reject it outright. You can continue going back and forth until a deal is reached or in some cases an agreement cannot be reached by either party.
Once the terms of the offer are agreed upon by both parties; a contract is drawn up and the sale moves forward.
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