If you’re looking to make the best possible offer once you find the home you want, where do you start?
Before anything else, hire an experienced agent who can help you go over the home buying process and how to make an offer so you know what you’re getting into. This way, you’re not totally unfamiliar with the process and you don’t run the risk of stressing yourself out.
Now, where do you start once it’s time to make an offer?
First, go over the neighborhood comps and figure out your finishing price. Just because you don’t start out in a multiple-offer situation doesn’t mean a bidding war won’t happen, so it’s important to know where you want to finish with your offer price.
Next, consider the terms and conditions of your offer. Price is only one part of the deal—you also need to think about things like the timeline and the contingencies. Have your agent call the listing agent and find out what’s most important to the seller so you can get a really good idea of how to set your terms and conditions.
If you find yourself in a multiple-offer situation, talk with your agent about adding an escalation clause to your offer. Basically, this clause guarantees that you’ll automatically bid a certain amount over the next highest offer up to a certain price. If you have a seasoned agent by your side, this is a great tactic because you get a chance to rewrite your offer without overpaying for the home.
After that, think about your offer’s contingencies. For example, a lot of buyers these days are waiving their mortgage contingency. The risk here, of course, is that if something happens along the way, you won’t get your mortgage. Mortgage companies are very thorough in their vetting process before extending a pre-approval, though, so the real risk is if the home doesn’t appraise. In this case, you may be asked to make up the difference in price or ask the seller to lower their asking price.
You can also waive your home inspection, but I don’t recommend doing so, because an inspection lets you know what you’re getting into and goes a long way in providing peace of mind.
Lastly, consider doing a rent-back. A lot of buyers are also sellers, and a rent-back agreement allows your seller to live in their home after it’s sold so they can close on their new home.
If you’d like to know more about how to craft the best possible offer or you have any other real estate questions, don’t hesitate to reach out to me. I’d love to help you.