Getting to the offer stage of a real estate transaction is an exciting time. After countless hours of searching, you’ve finally landed on the home you’ll feel comfortable in. Don’t get too carried away, however, and ignore the reality of whether the sale price is fair or not. Doing a comparison of the home you have your eye on and other similar homes that recently sold in the area can protect you from overpaying. This comparison should take into account pieces of information like the length of a property’s stay on the market. A real estate agent will generally do this comparison for you to determine whether a home is priced properly. Various online services will also accomplish the same thing.
At every stage of the real estate transaction process, keep in mind that each step is negotiable and that if you are unhappy with something, you should certainly bring it up. Getting your conditions in writing is an important aspect of the process as well. Make sure that you fight for what you are hoping for. Getting what you want down on paper before falling in love with a home can keep you from making a rash decision based on emotion instead of a logical decision based on fact.
You may also want to keep these bits of advice in mind:
- Make sure you make your offer on paper. Verbal offers do not carry weight.
- Don’t feel compelled to offer full price unless you are sure that the home is undervalued. Coming in with an offer below the sale price will give you the ability to negotiate from that point.
- Make sure that an inspection is part of the process. As part of any contract, you should write in that if an inspection turns up any significant problems, they need to be worked out before a deal is final.
- Making a contract contingent on whether or not you get financing for the home can be a way to give yourself an out if needed.
- A lawyer that specializes in real estate can be a great resource to help you along the path of your transaction.
One tool that a buyer can use to convey the fact that they are serious about purchasing your home is earnest money. It is a great compensation method for removing your home from the market and ignoring other offers. Anywhere from one percent to five percent is a generally accepted level for an earnest money payment. It is then held in escrow until the closing.
All of your escrow money dealings of the home should go through your agent or title company. No payment is made directly to the seller of the home and the buyer should get the escrow money back in full at closing.
At the time your offer is accepted by the seller, you are officially part of a binding agreement to purchase the home. Make sure that you include any contingency you might need later at this point because you cannot go back later and retroactively add a clause. Contingencies are needed loopholes that let you get out of a contract if you are not able to get financed or the home fails inspection, for example.