7 Things to Know About Placing an Offer on a Home

Making an offer on a home is a calculated decision that requires a bit of strategy, especially in a hot real estate market. There are several big factors at play, including careful planning and having your finances in order before placing an offer on a home. Below, we’ll highlight some things you should focus on as you prepare to buy a new home. There’s more to the offer process than just money – but of course that’s important, too! The tips below can contribute significantly toward a smooth experience when you place an offer on a home.

1. Be informed

Arguably the most beneficial thing you can do for yourself during the home buying process is to stay informed. While your real estate agent and mortgage lender will be there for you every step of way, at the end of the day, this is your investment, so it’s important that you’re aware of the ins and outs. If you’re ever unsure of something, always ask questions and do your research as you go along.

2. Aim for conditional approval

Generally speaking, you can get a pre-qualification letter and a conditional approval from your mortgage lender at the start of your home search – but this will vary by lender. If you have the option, consider getting conditionally approved before you start your home search (otherwise known as up-front underwriting). This means your lender has thoroughly reviewed your financial background and is certifying that you’re able to afford the homes you’re looking at – which can give the seller peace of mind to move forward with your offer since it’s less likely it will fall through.

3. Plan ahead

Whether you’re buying a home alone or with someone else, make sure you decide on how much you’re comfortable spending up front. This will help you avoid wasting time looking at houses that are too pricey – and if you get into a bidding war, you know when to step away if the price becomes too high.

4. Be like-able

Buying a home is not necessarily a popularity contest, but being pleasant and letting the seller know why you love their home can work in your favor.

Sometimes it’s not just money that motivates a seller – tugging at their emotions can give you the upper hand, especially in a multiple-offer situation.

You can do this by writing a letter stating the reasons you love their home and why you want to live there. Starting a family and want to bring your baby to a home of your own? Want to live closer to your family? Seeking your forever home to make memories in? Share your reasons why and you just might win the seller over.

5. Make it reasonable

When it comes to placing an offer on a home, it’s certainly tempting to lowball it – after all, who doesn’t want to save as much money as possible? However, it’s important to do your research and understand the market value of the home. Go too low and you risk offending the seller and hearing a flat-out ‘no’ – but that doesn’t mean you can’t offer less than asking price altogether. This is where your real estate agent can be very helpful and offer up advice on what a ‘reasonable offer’ looks like. But remember, it’s ultimately your decision, so only offer what you’re comfortable spending. If the price is out of your comfort zone, move on to the next!

6. Negotiate more than just money

It’s almost expected that there will be negotiation during the offer process – but it doesn’t always have to involve home price. Say you make an offer $5,000 below asking price because you feel the home needs some improvements and the seller comes back and counters the full asking price (basically rejecting your offer price). Instead of going back and forth over price, consider negotiating things like a home warranty, new appliances, new home systems, closing costs, and even a full repair of things that need to be fixed. Often, this strategy can help you achieve your goals more easily than solely being fixated on the home price.

7. Be flexible if you can

In a hot real estate market, being flexible can go a long way toward getting the home you really want. While this may not be necessary in a cold or neutral market, it can certainly give you the upper hand when inventory is tight. For example, maybe the seller has a specific closing timeline they need to follow (either short or longer than usual) or maybe they need to rent the home back for a month or two while they’re looking for a new house.

If you’re the buyer who is able to meet the seller’s needs, your offer is more likely to be accepted.

At the end of the day, making an offer on a home is as much about appealing to the seller as it is doing what’s right for you. Don’t let yourself get too caught up in winning over a seller that you end up spending too much or foregoing things you really wanted during the negotiation process. The right house will come along – and when you’re ready to begin the mortgage process, one of our mortgage bankers will be here to guide you through.