Making an offer is one of the most important steps in the home buying process. That’s the point of knowing whether your home belongs to you. There is a lot to consider, from deciding how much offering to offer and preparing for negotiations, until you choose accidental money and serious money.
This Redfin article outlines how to make an offer at home in six steps. Whether you’re buying a home in Minneapolis, Minnesota or a townhouse in Austin, Texas, there are things you need to know about making an offer at home.
Six steps to making an offer at home
1: Decide what amount to offer
2: Select a contingency
3: Determine the amount seriously
4: Write an offer letter
5: Please submit your offer and wait
6: Negotiate terms of sale
What to do before making an offer?
Before making an offer at home, there are a few things that can help make the process smoother. Let’s explore them.
Get pre-approval for your mortgage
The pre-approval letter tells you how much your lender will lend you to buy a home. Most sellers don’t take offers seriously without prior approval, so if you’re ready, you can move faster when you find a home.
Please note that pre-approval is different from pre-qualification. Pre-approval is more serious of the two, as lenders will look into your finances and determine how much you will lend. Prequalification only uses the information provided.
Learn about the local housing market
If your home quickly exceeds the price, you could be in a competitive market. You will either compete with other buyers or be drawn into a bid war at home. Knowing the market can help you determine the price you offer. Find out the home trends in your area and seek expertise from a real estate agent.
Get insights from your agents
Real estate agents may also know information about why sellers sell their homes. If the seller is selling in a hurry, you may be able to submit a slightly lower offer. However, if the sellers are not in a hurry, they may be more likely to wait for a higher offer.
Understand the basics of the offer
Real estate agents use standard templates that contain all the important details to put together offers.
Your offer price at the beginning of payment amount serious money amount You deposit a copy of your letter before your approval and the contingency you want to include a breakdown of closing costs and the expiration date of the offer when you want to close (i.e., to complete the purchase, purchase)
We’ll cover some of these, but your agent should be able to help you walk around them all to you and decide how to make an offer that works for you.
How to make an offer at home
Once you’ve learned what to do before making an offer at home, you can proceed to the process of making an offer.
Step 1: Decide what amount to offer
If you’re already pre-approved, you probably know very well how much you can afford in the home. However, the price you offer depends on many factors, such as the competitiveness of the housing market, the home itself, your budget.
Housing Market Status:
Buyer’s Market: More homes for sale than buyers – there may be opportunities to offer something lower than the home list price. Seller’s Market: Fewer homes are for sale than buyers – you may need to offer to exceed the listing price to stand out above the competition.
Budget: In many cases, budgets are the biggest factor in determining how much you will provide at home. Even if you approve a larger mortgage, that doesn’t mean you should buy more than you can afford. Consider offering less than a mortgage to get away from negotiating.
Home: There are situations where it makes sense to provide an amount that is above or below the list price, or other situations where it should meet the list price. Your agent can help you decide which offer is right for you. Some factors are:
Time in the market: The more your home is on the market, the more likely the seller is to consider a lower offer. Repairs required: If your property requires a lot of repairs or is turnkey, it may affect the amount you provide. Equivalent Homes in this Area: Your real estate agent can pull out comparable homes, also known as “comps.” This gives you insight into whether the price of a home is quite pricey. Competition: Competition for a home can have a big impact on your offer. Talk to your agent about handling a bid war or creating a backup offer if the seller has already accepted.
Step 2: Select an emergency clause
Contingency protects you as a buyer by providing a way to back out of the contract if certain conditions are not met. If you use an emergency to cancel a transaction, you will usually be able to collect serious money.
Sellers prefer offers without contingency, so use them sparingly if possible. The contingencies available will vary depending on your location and current housing market, but here are the most common ones.
Step 3: Determine the amount seriously
The third step is to decide how much you will provide with serious money. Ernest Money is usually a deposit of 1-3% of the selling price of a home and is paid after the offer is accepted. It shows you are committed to buying a home.
If the sale has passed, it will be applied to closing costs. If you withdraw the sale due to a covered reason for a contract, such as an unfulfilled contingency, the serious money will be refunded to you. If you withdraw from the sale for another reason, the seller will maintain serious money.
Step 4: Write an offer letter
This refers to a legal offer document, not a personal letter to the seller. Personal letters to sellers are discouraged as they can violate the Fair Housing Act.
Your real estate agent will draft an offer letter for you, but if you work without an agent, you need to:
The address of the house you are offering to buy someone else’s name in your name and the title of the house. Contingent events that you want to include seller concessions like your offer price repair or closure are expected to move to the expected date to the expected date to close the loan deadline you expect to sell pre-approved deposits pre-approved letter items you wish to sell at the sale.
Step 5: Submit your offer and wait
Once your offer is ready, the real estate agent will submit it on your behalf. If the seller receives or expects other offers, they may have to wait several days for a response.
Step 6: Negotiate the terms of sale
Negotiating with sellers is common and it is important to have an experienced real estate agent. Discuss in advance which aspects of the offer you are willing to negotiate and what is unnegotiable. Below are three scenarios you will face after submitting your offer:
Scenario 1: Seller accepts your offer
If the seller accepts your offer, you proceed to the next step. This means signing a purchase and sales agreement, gathering serious money and applying for a mortgage.
Scenario 2: Seller creates a counter offer
The second option is for the seller to create a counter offer. It’s up to you and your real estate agent. Negotiations are usually informal and will help you reach an agreement – or leave the deal.
There are a few things to consider:
There is no need to negotiate the purchase price. A seller’s counter offer could be a higher purchase price than you offer, but that doesn’t mean you need to accept it. You can consider negotiating repair costs or other concessions. Learn what the seller is looking for. Your real estate agent will reach out to the seller and his agent to determine what the seller is looking for. Do they want you to remove the contingency? Were they looking for a higher price? This information will help you decide what to negotiate.
Scenario 3: Seller rejects your offer
The final scenario is that the seller rejects your offer. Maybe your offer was too low or there were cash buyers. If your offer is rejected, you can start looking at other homes in the market.
What happens after your offer is accepted?
Congratulations, your offer has been accepted. Here’s what you can expect:
Sign the contract: Read carefully and understand the details before signing. Securing a mortgage: You must apply for a mortgage. The lender will perform a deeper financial review, complete the loan terms and order valuations to confirm the value of the home. Schedule an inspection and assessment: Be sure to have a home inspection to identify real estate issues and arrange a home assessment. Close your new home: Once the contingency is satisfied and your mortgage is ready, you can sign the documents and close them at home. Your lender will transfer your funds to an attorney or title company, confirm your purchase and receive the key.
FAQs about making an offer
How much should I put?
Your down payment amount will vary depending on the type of loan and budget, but there are a few things to consider.
0% Down – VA or USDA Loans 3-5% Down – FHA and some traditional loans 10-20%+ Down – Avoid private mortgage insurance (PMI) and lower monthly payments.
What would you do if you were caught up in a bidding war?
A bid war occurs when a seller receives multiple offers in a short time. Buyers compete with each other, and may increase the price of offers, give up on contingencies, or make other “concessions” to make the offer more attractive. Your agent can provide advice that will help you avoid war bids whenever possible and navigate wisely when you can’t.
How low is it too low to serve at home?
Offering lower offers at homes below the list price depends on several factors. Your real estate agent has insight into what’s too low to offer.
How long does it take to close the house?
It may take 30-60 days to close at home on a mortgage. There are things you can do to prevent delays and speed up the closure process.
