Tips for Creating a Strong Home Purchase Offer
When you have finally found just the right home and you are ready to
make a home purchase offer, there are several tips you should keep in mind to
make sure you design a home purchase offer that will give you the best possible
chance of acceptance. While there are many areas of the country where the market has
bottomed out, there are also some pockets where values have held strong and it is
not unusual for homes to bring multiple purchase offers. When that is the case and
you are considering a home in a desirable neighborhood, it is important to make sure
you know how to design an offer that will be attractive to sellers.
The first thing you should understand is that the most important
element in ensuring your offer is competitive is the price you offer. Unless you
happen to be able to offer cash, your ultimate goal should be to offer as much as
you possibly can within the value range for which the home will be appraised.
Along those lines; however, avoid making a high offer is clearly
designed to be negotiated lower when the home is not able to appraise for the actual
purchase price. Be prepared for the fact that you might be asked by the listing agent
to remove the appraisal contingency from your offer if it is quite a bit higher than
the purchase price. The listing agent might also require that you document that you
have sufficient cash on hand in order to make up the difference between the offer
price and the listing price if the property does not appraise for the purchase
price.
While price is a number one priority for most sellers, closing is
also quite important. In some cases, sellers will even select a lower offer if there
is a chance it will close over a higher offer where there is a chance it might not
close. This is precisely why cash offers usually trump financed offers. That is the
case even when the cash offer is actually lower. The seller is able to gain some
peace of mind that the glitches that are often associated with financed offers, such
as loan underwriting problems and low appraisals, do not get in the way of the deal
closing.
To ensure your home purchase offer is competitive, make sure
the seller knows how much you like both the home and the neighborhood. Be certain
your approval letter provides the listing agent with a detailed outline of your
qualifications, including whether your credit has been verified, your job tenure and
the amount of cash you are putting into the deal.
Be certain your agent is in contact with the listing agent to
determine the priorities the seller may have. This can give you a good idea of what
it is that the seller is looking to gain from a successful home purchase offer. For
instance, some sellers may be more interested in a fast closing. Other sellers may
place more of a priority on buyers who are willing to accept the property as-is.
Numerous factors, such as the length of the contingency period, can factor into a
seller's decision making process regarding offers. When you know what the seller is
looking for, you will be in a better position to design a stronger offer.
Remember that your home purchase offer will be submitted with a
letter from your mortgage professional as well as possibly a letter from your agent
or broker. It can also be a good idea for you to submit a letter as well to the
seller. This provides you with an opportunity to let the seller know a little
something about yourself, your family and what it is that appeals to you about the
house and the neighborhood. Always check with your agent regarding whether this is
appropriate for the situation or not. If so, you might even consider including a
photo of yourself and/or your family.
Many sellers in today's real estate market are still selling their
properties below the price they once thought they would be able to obtain. This can
even be the case in situations where the property is garnering multiple offers.
Including a letter with your home purchase offer can help to make a lower price go
down a bit easier and can also help to set you apart from other buyers. Making
yourself appear more likeable and also personalizing your offer can go a long way
toward getting your home purchase offer accepted.
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