So, you are looking for that perfect house to call a ‘home,’ and you finally find one! It’s priced right, and in such a competitive market, you want some smart tips to make sure that your offer is the best guarantee that your dream of making this house yours comes true!
Freddie Mac gives “4 Tips for Making an Offer” in their recent Executive Perspective. Listed below are the 4 smart tips they covered with some extra information for your consideration:
1. Understand How Much You Can Afford
“While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”
This ‘tip’ or ‘step’ should really start before your home search process.
As it has been mentioned before, getting pre-approved shows home sellers how serious you are about buying, and will give you the confidence of knowing that you have already been approved for the mortgage amount. You will also want to know if you are prepared to make any necessary repairs to the house (ex: new roof, new furnace).
2. Act Fast
“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.”
According to the latest Existing Home Sales Report, the inventory of homes for sale is currently at a 3.7-month supply; this is well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand is outpacing the supply of homes for sale, this causes buyers to compete with each other for the home of their dreams.
Work with your realtor to present an offer as soon as possible. The smart tips you get will give you the best edge.
3. Make a Solid Offer
Freddie Mac offers this advice to help make your offer the strongest it can be:
“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”
The market is so competitive that you need to talk with your agent to come up with ways to make your offer stand out.
4. Be Prepared to Negotiate
“It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford.
Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”
Once your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can negotiate repairs that may need to be done with the seller, or cancel the contract altogether.
Whether you’re buying your first home or your fifth, having a local professional on your side who is an expert in their market is your best bet in making sure the process goes smoothly. Happy House Hunting!
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