When is the right time to make a Home Purchase offer? You need to understand that making a purchase offer and actually purchasing a house are two diverse actions. A lot of home buyers often confuse the two but we are here to help. If the house you are planning to buy is likely to sell quickly, and if you have a method to later cancel the contract, you should make a purchase offer immediately. Do not delay or try to get every questions answered before you make a purchase as you may lose the chance of getting your dream home. Some other buyer may acquire the home while you are preoccupied learning about the pros and cons.
If you like a certain home, chances are numerous other buyers like it too. Understand that a lot of home buyers are looking for an excellent purchase just like you. Losing a good home purchase does not always mean it is meant to be that way. Often it means that you could have acquired it but its complex.
When a seller agrees on a home purchase offer, the seller expects the buyer to purchase the home at the agreed price and believes the home is in perfect condition. The buyer, on the other hand, is expecting that the transaction will be completed because the home is in perfect condition. It is rare for the expectations to be in line with reality. Conditions can alter once a contract is provided and no home is perfect. Sellers should accept that buyers often submit requests for repairs. In turn, buyers should realize mortgages can be denied and low appraisals can affect the success of the deal.
Almost all homes in the sellers’ market sell within thirty days. There are numerous qualities and characteristics of a home that makes it sell fast. The top two combinations include:
1. Turnkey homes in excellent condition, in high-demand neighborhoods and priced right.
2. Cosmetic fixers priced below comparable sales and in attractive locations.
If the house you are interested in has these characteristics, you should immediately make a purchase offer, providing you include your cancellation rights. Our real estate agents avoid wasting time providing an offer that they know a buyer may later cancel. They will try to talk you out from making an offer to purchase. Our site provides good agents that will help with your home purchase. Our agents have your best interests at heart.
Advantages of making an immediate purchase to offer:
1. Prevent others from acquiring the home you like. A seller cannot accept another offer if he/she already accepted an offer from you. An exception is a back-up offer, which is only good if you cancelled your contract.
2. If you are the first and the only one to make the offer, you can negotiate on the terms and rice. Unlike when there are multiple offers, your negotiation authority is strengthened when you are the first and the only one to make an offer.
3. Other interested buyers will usually give way once the seller accepts an offer from you, thus giving you an opportunity to make re-negotiations.
Disadvantages of making an immediate offer to purchase:
1. If you are undecided between two homes and created a contract on home 1, home 2 might not be available any more if you should change your mind and cancel the first contract.
2. Reimbursement of the deposited money is not immediate. Both the seller and buyer need to sign the cancellation contract. In other areas, a seller can delay the signing of the cancellation instructions for thirty days without any penalty, for the approval to return the good faith deposit.
3. Buyers can incur home inspection fees, appraisal fees and credit report fees that are non-refundable. Title policy/escrow and other closing expenses are waived upon the cancellation.
Although, you still have a lot of choices even after you fail to purchase the home you want, it can be to your advantage to learn from the mistakes of other buyers who lost the chance, just because they failed to act quickly. Learning from the mistakes of others is better than learning the painful lesson yourself.
For any purchase of a home, never bid or negotiate out of emotion. Think of the 5 yr rule of home ownership (to the best of your knowledge your intent is stay in a home for 5yrs in order to maximize return or profit) Review recent home sales and patterns of the area you are seeking to purchase in. If the home of interest is listed at $475K and one just sold at $515K with the same floor plan and characteristics, and was listed lower and brought in multiple offers, you will need to bid higher than the list price. Buyers automatically assume a seller will counter them no matter what they bid. This is not always true. If you are serious about purchasing a home then know what the immediate market is demanding. I know of several buyers that will only offer list price on a home after being advised of recent homes sold of like square footage and characteristics closing at price higher than list. Every time they lose out and get frustrated. I am not saying you have to offer an arm or leg above list price but if you are serious about making an offer and to increase your chances of acceptance and/or getting countered back in a multiple offer situation bid a little over list price and streamline your demands up front. Your purchase offer should always have contingencies in contract to protect you but you can streamline those contingencies to make more attractive your purchase offer to a seller.
Always get inspections unless you are a contractor and/or someone who is very familiar with home construction. Don’t get discouraged in multiple offer situations if you end up bidding for a few homes before getting an acceptance. Our site will provide agents that will help you make right decisions. You get more familiar with purchase contract and terms. Always negotiate purchase price within your comfort level. Do not try to negotiate on homes that are at the top of your budget that are showing multiple offers in recent weeks with prices and values going above list price and ultimately above your purchase power. Do not set yourself up for disappointment.