When you make an offer to purchase a house you are opening a dialogue with the Homeowner. You want to buy the home at the price you’re willing to pay; that doesn’t always equal the listing price. I think it’s important to view the offer as a process and not the be all and end all of the transaction. Often Buyers feel “constricted” by the offering process. It is perfectly understandable that you might feel impatient with the process of shopping for a home. Too, some Realtors might try to make you feel as if you must make your “best and highest” offer.
I encourage you to discard that oppressive feeling. Liberate yourself and use the offer as a way to get what you want: the home you like at the price you’re willing to pay.
Follows is a process I recommend to my clients on the “How-To” of making an offer. I hope you find it useful in achieving your goal of homeownership.
In my view of the offering process, I want my clients to present themselves as the best Buyer for a home the Homeowner has ever seen. Everything you do within this “How-To” creates that sense in the mind of the Homeowner.
I know from personal experience these methods work. Many of my clients have had offers accepted by following my advice. Realtors have told me, “We had another Buyer offering $10,000 more than your client, but your client impressed us and the Homeowner as clearly being the ‘better Buyer.'”
1. Always make offers in writing. Yes, it is absolutely true that offers can be presented verbally. Don’t do that. Put your offer in writing every time. Even if you are in a situation where you and the Seller are sending counter offers back and forth, every new offer should be in writing.
When your offer is in writing, you come across to the Seller as serious. Think about it, anyone who is taking the time to go in to the real estate office and sign the form is serious about buying a home. Seriousness counts big time.
Put the following into your written offer:
-The amount of your “earnest money deposit” or “good faith deposit.” That is the amount of money you’ll put into escrow with the Seller’s attorney upon signing the contract of sale.
-The amount of your mortgage financing. Of course you’ll back this up with a prequalification letter, but you must include the amount of your mortgage in the offer.
-Items included in the sale. If the appliances and the chandelier in the dining room are to be included in the sale, make sure they are written in to the offer. This shows the homeowner you were paying attention when you inspected the home and asked, “What’s included in the sale?”
-The name and telephone and fax numbers for your attorney.
-Anticipated contract date. Always make this date within 48 hours of your offer. Present the assumption the Seller will accept your offer and immediately forward a contract to your attorney.
Again, this demonstrates to the Seller how serious you are. You are in effect saying, “I am so serious about buying this home I want to sign the contract immediately!” Imagine how many other Buyers out there are delaying things like signing the contract (and potentially changing their minds).
-Anticipated closing date. This is an interesting point for the offer. I always recommend putting the closing date for an offer within thirty days of the contract (check with your mortgage Lender to be sure this is possible). The fact is most closings take place within 60 days of contract, and your attorney will likely put that in the contract, but if your offer says “thirty days,” once again you demonstrate how serious you are about buying the home.
2. Prequalification letter. Your mortgage professional should be available to fax a prequalification letter within hours of your making your offer; even on Saturdays or Thursday evenings. The prequalification letter should match your offer, not display a higher loan amount. You don’t want to give away your negotiating position by showing the Seller you can afford more than you’re willing to pay.
3. Mortgage pro phone call. I think a phone call from your mortgage professional to the Listing Agent is a home run. When the Listing Agent here’s from the mortgage person directly how eminently qualified you are, imagine how that raises your profile to the agent and the Seller!
4. Credit Scores. Your mortgage person should be prepared to disclose your credit scores. While you don’t want your credit report released (that’s not allowed, anyway), many times the Listing Agent wants to know the credit scores.
5. Engineer ready to go. When you sign your offer, be sure to tell your Realtor that you’ve already spoken with your Home Inspector and you can have the inspection done tomorrow. Whoa, that’s really the mark of a serious Buyer!
6. Get ready with your counteroffer. If you offered less than the asking price, then you need be prepared with your counter offer if the Seller either declines or counters your opening offer. All of the steps above should be repeated with the new price replacing the original number. Organization and swift responses rule the day! Oh, you may not want to counter offer. That’s okay, too.