AN OFFER TO BUY
By this time, you feel you are ready to make
an offer on the house you have chosen. You need
to determine what the initial offer should be.
There are some things that you should consider
when determining the amount to offer:
Sale price of similar houses in the neighborhood
for the past year or so. This gives you a
pretty good estimate of the current market
value of similar properties. But, bear in mind
that no two houses are alike, even if they
look the same.
When you are ready to make an offer, your
Realtor will prepare a written offer to be
presented to the seller's agent.
Inspection results. Go over the
inspection checklist and weigh the good points
against the bad. Also, estimate the cost of
fixing the problems. The severity of the
problem and the cost of fixing it, may impact
your offer amount.
Mood of the market, in general and the
neighborhood, in particular. If it is a
seller's market, the houses are moving fast
and close to the asking price, and you really
want the house, consider offering close to the
market value of the house. This will ensure
that you are a serious contender, even if the
buyer gets multiple offers. On the contrary,
if the market is slow as it is currently,
and/or the house has been on the market for a
while, or the seller is eager to sell, you
might want to leave more room for negotiations
after your initial offer.
An offer usually includes an offer price,
closing date, financing information,
contingencies and earnest money as a token of
buyer's commitment to buy the property. Earnest
money could vary from $500-$1000, although it is
usually $1000. You may make your offer
contingent on some outstanding issues being
resolved, such as, sellers paying closing costs,
sellers fixing some/all of the problems that
surfaced during inspection, getting ownership of
the house by a certain date, specially if there
are tenants occupying the house, etc.
Once the offer has been presented to the
seller's side, they should get back to your
Realtor within the specified time. Generally
this phase may be associated with some
negotiations between the buyers and the sellers.
Eventually, the deal either gets negotiated or
If the deal has been negotiated and all the
parties agree to the terms and conditions, then
proceed with the remaining home inspection (if
that was a condition). If the deal could not be
negotiated then you may either continue to look
at more houses or consider making an offer on
your next choice.
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