Posted on: 18 June 2018
If you've found the real estate listing for your dream home and want to make an offer, it is definitely something you want to put your best foot forward with. A seller can accept or decline an offer letter for a variety of reasons, and may select another offer if there are multiple offers on the table. Here is what should go into a great offer to ensure all your bases are covered.
The biggest factor in your offer letter is going to be the final price that you want to pay. You can discuss with your agent the strategy for getting an accepted offer on a home with multiple offers on it, but for the most part, coming in around asking price will help start negotiations rather than have the offer outright rejected.
The offer letter is also the time to ask for contingencies. These are clauses that allow you to back out of the purchase of the home if they are not met. Many buyers ask for contingencies that allow them to back out of the sale of the home after the inspection and the appraisal.
If there are major problems found with the inspection, you'll want a way to avoid buying the house so that you do not have to make unforeseen repairs. While you can negotiate the price of the home or that the seller fixes the problems, you will have the option to walk away. A low appraisal is also worth walking away from, since it may not allow you to get the financing you need if the bank sees the home as not being priced correctly.
The Earnest Money
Part of making an offer on the home is giving the seller earnest money. This is essentially like a down payment, but not the same as what you give your mortgage lender. You can get the earnest money back when contingencies are not met, but it prevents you from otherwise walking away from the purchase and wasting the seller's time.
A seller may use the earnest money to pick between multiple offers. A seller that is more serious may be willing to pay more earnest money, which means the buyer has more to lose by backing out of the deal. Not offering any earnest money can show that you're not serious about the home, putting more risk on the seller.
For more tips on what needs to go into the offer on a home, work with your agent.Share