Are you hoping to buy a house in the near future? If this is your first time navigating the process of homeownership, you’ll need to learn how to make an offer on a home. It doesn’t involve knocking on the prospective seller’s door and expressing interest. Instead, it starts with a visit to a mortgage lender.
How to Make an Offer on a Home
Some housing markets are incredibly competitive. When you are ready to buy, you need to be prepared to act quickly to secure the property that you want. Taking steps to demonstrate that you are a serious buyer who is ready to move forward can help convince a seller to accept your offer.
Preapproval: Your First Step
Why should you get preapproved for a mortgage before you begin shopping for a home? Although it may seem odd to start the process of securing financing before you know exactly what you will be purchasing, there are actually multiple advantages to this approach. As Investopedia explains, starting your housing hunt by getting preapproved for a home loan allows you to explore your financing options with an experienced professional, gives you a chance to identify and correct any issues with your credit early, and provides you with an opportunity to learn exactly how much you can afford so that you have an accurate idea of your price range. In addition, having a preapproval letter in hand makes it clear to sellers that you are a serious buyer who is able to obtain the financing necessary to buy their property.
Need another reason to get preapproved? Remember that your lender can be a valuable resource. When you establish a relationship with a mortgage professional early in the process, you gain access to someone who understands what lies ahead and can help guide you along the path to homeownership.
Making an Offer
Once you have found your dream home, it is time to make an offer. That means that you will need to decide what you’re offering. While the seller has an asking price, you have the option of offering that amount, more, or less. All of these strategies have pros and cons; the right approach depends on your situation. One thing is clear: you should do your homework before deciding on a price. Either you or your real estate agent should complete a comparative market analysis to see what similar homes in your area have sold for recently. You’ll also want to consider how long the property has been on the market. If a house has just arrived on the market in a competitive area, you many need to offer a higher bid to secure it. On the other end of the spectrum, when a house has been lingering on the market for a while, the sellers are often more willing to consider an offer below their asking price.
What an Offer Includes
A purchase offer is a legal agreement, so it is important to get everything in writing and to have it looked over by an experienced real estate agent or real estate attorney to ensure that your interests are protected. As Money Crashers explains, every purchase order should include the following information:
- A legal description of the property
- The total purchase price
- Any financing
- Any earnest money deposit
- The type of deed that will be granted and any restrictions on it
- A description of any appliances and fixtures that will be included in the sale
- Information on how taxes and utilities will be paid
- Provisions detailing who pays for items like title insurance, a survey, and any required inspections
- Information regarding contingencies like a failure to obtain financing or an unsatisfactory home inspection
- A time limit for the buyer to consider the offer
- Target dates for closing and delivery
Preparing for Acceptance
A seller has the option to accept your offer, refuse it, or make a counteroffer. As U.S. News and World Report suggests, it is a good idea to prepare for acceptance while you wait to hear from the seller. After putting in an offer, take some time to gather up the documentation needed to complete the mortgage application process. You should also be ready to schedule and pay for any necessary inspections.
At PrimeLending of Springfield, Missouri, we do our best to make your path to homeownership as smooth as possible. Our team of experienced loan officers would be happy to answer your questions, help you explore your options, and provide the accurate information that you need to make the best decision possible. With our expertise and commitment to clear and timely communication, we can guide you through the process from application to closing. To learn more about getting preapproved or how to make an offer on a home, please call 417-616-0777 or contact us online.