How to Make an Offer on a House
Steps to Ownership: The Offer
The first rule of understanding how to make an offer on a house is to BE REASONABLE. Sure, we all dream of a world in which we can buy mansions for pennies on the dollar. But this is reality. If your offer is ridiculously low, a seller may cut you off completely. Find out more about the current homeowner. Do your homework. Generally, the owners of newly marketed houses are more willing to negotiate. On the other hand, if a house has been on the market for a while, you may as well forget about negotiating.
After you find your dream home, BID QUICKLY! It doesn’t matter whether you know how to make an offer on a house if you don’t actually make the offer. Discuss the details of your offer with your RCM agent, including the importance of an appropriate initial offer. You may not want to seek counsel from the seller’s agent. Remember, they are representing their client’s best interest, and that translates to their own best interest!
Look into whether the asking price differential percentage has increased or decreased at incremental checkpoints in the past year. Some people pride themselves on knowing and sensing the true value of things. But knowing the auction price of an antique clock is not the same as knowing how to make an offer on a house. Even if you have great property value assessment skills, you may not really know how to make an offer on a house. It is largely recommended that you communicate with as many real estate experts as possible. Your RCM realtors have a plethora of resources and personal expertise that they would be more than happy to share with you.
Use appliances as negotiating tools. Offer a little more if the seller will let you keep the refrigerator, or even the washer and dryer! If the seller seems unwilling to accommodate your request, reduce your offer to allot for the purchase of those items. This is obviously not going to give you anywhere near the same dollar amounts as the house itself, but it can tip the scales in your favor, especially in a favorable market. It’s a great tip when it comes to deciding how to make an offer on a house.
Once both parties agree on a price, the seller's agent will construct an “offer to purchase” the agreed-upon home. This will include an approximate closing date. Realistically, you should expect a month-and-a-half to 2-month timeframe. If you have retained a buyer’s agent or legal counsel, have them review this proposal to ensure the contract hinges on the following:
- Procurement of a mortgage for the buyer (that’s you)
- Home Inspection report or collection intent
- 24-hour (prior to closing) guaranteed final walk through (by owner)
The seller and his/her representatives will likely expect a good-faith deposit. This is typically 1-10 percent of the selling price, and is deposited in escrow.
If the contracted offer looks good, call your mortgage broker or loan officer immediately, and move swiftly to agree on your terms. Discuss fixed rate versus adjustable rate mortgages, your most current credit checks, possible point payments, home appraisal agreements, and any fees for these items. And congratulations! Not only have you learned how to make an offer on a house, but you’ve actually made one! Maybe you should be the one teaching prospective buyers how to go navigate the home-buying process.
RCM National Realty is an exclusive boutique real estate company. Our mission is to help clients customize their buying or selling experience to best fit their families’ schedule and housing needs. With our diverse group of agents, it is easy to find a qualified professional who understands your market of choice. Let RCM National Realty open the doors to your real estate dreams!