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Home > Home Buying Tips > Tips for Creating a Strong Home Purchase Offer

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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