Making An Offer On A Home

Your strategy for making an offer on a home, and handling the follow-up negotiations, can depend on several factors. These include the sales prices of comparable homes in the area, the favorability of the market for home buyers, the number of other people bidding on the home, as well as the overall condition of the home.

California real estate purchase offerBefore you start negotiating, set a firm ceiling on what you are willing to pay (or can afford). That will help you keep your cool if you become caught up in a bidding war or in a series of counteroffers. Shop for homes below your maximum price, just in case you have to pay more than the seller’s asking price. In a buyer’s market, when sales are slow, you can get away with looking at places higher than your budget a bit. Sellers are more willing to negotiate a lower price, along with other concessions.

 A real estate agent can provide recently sold property prices in the area , as well as prices of comparable homes currently on the market. Making a low-ball offer can sometimes pay off in a buyers market, but you have to feel out the market and the individual seller’s situation. However, some sellers can just as easily dismiss you for undervaluing their home and not even wanting to send you a counteroffer.

You’re going to have to put up some earnest money into escrow, typically 1% to 2% of the purchase price in San Diego. The more you put down, the better your chances…since it suggests you’re a more serious buyer. The earnest money in the end becomes part of your down payment, so it doesn’t add to your out-of-pocket cash to buy the house.

Of course, if you are lucky enough to be paying with all-cash, you will have an edge over other buyers. If you’re financing the purchase, your best move is to get a pre-approval letter from a bank, which will be sent in with your offer. Without this letter, you will be overlooked by most every seller.

If the home sellers won’t come down to a price you like, you might ask them to cover a portion of your closing costs. If you’re flexible about the closing date, offering the owners a rent-back period can be smart, since they can live in the home for a given period after the closing. If you want to make an emotional appeal to the owners, you could write them a letter describing how much you love and why you want the home. For some homeowners, it’s not just about the money, it’s about selling it to a great individual or growing family.

After the home inspection, you may find that the home needs repairs. At this point, you can ask for certain repairs to be done, or a credit back at closing. Most sellers are willing to oblige with repairs (such as a broken garbage disposal), but not upgrades (such as replacing all the plumbing, simply because it’s old).

 

For more information on this topic:

619.384.2248
Ryan@RyanYourRealtor.com

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