5 Factors to Consider Before Making an Offer on a Home

Buying a new home can certainly be an exciting and emotional process, especially when you find a house that not only meets your must-haves, but also provides you with that indefinable feeling of home that you’re looking for. But an emotional attachment to your property of choice is only likely to get you into trouble when it comes to fixing the amount of your offer. Luckily, a skilled and experienced real estate agent can help you with the negotiation process. But ultimately it’s up to you to decide what you’re willing to spend to get the house of your dreams. And you need to make sure that the value of your purchase matches the price. While you probably can’t cut out the emotional aspect of buying a home entirely, there are several practical things to consider before making an offer.

  1. Your budget. It is imperative that you stay within your budget when making an offer on a home, and this involves more than just the initial number you proffer. You have to consider that the negotiation process is likely to take you above your first offer, so if you put all your cards on the table to start with, you could be shooting yourself in the foot. It’s also important to remember that there will be additional costs, both initially and down the line. For example, you have to pay all kinds of fees and closing costs to banks and real estate agents when you buy a home, unless you make other arrangements (like asking the seller to pay closing costs). And once you own a home, there will be property tax, insurance, and maintenance to contend with in addition to your mortgage. So carefully consider all costs and how they fit your budget before you make an offer.
  2. Asking price. Before you make your initial offer, you must carefully consider the asking price. Is it over, under, or close to market value? Does the seller seem motivated or willing to wait for the right price? How long has the house been on the market and has the price dropped in that time? Are there known issues that must be addressed after purchase (such as a faulty roof or a cracked foundation) and is the seller willing to give an allowance for such costs? Taking the advice of your agent into consideration when it comes to weighing these questions can help you to make an offer that won’t offend the seller.
  3. Home inspection. Before you finalize any offer, you need to make it conditional on the home inspection. This will allow you some room to negotiate if it turns out there are extensive and expensive repairs needed. You don’t want to get locked into a price only to discover that the value of the home is far less than anticipated due to damages.
  4. Needed repairs. Once you have become aware of needed repairs to a property, it should certainly impact the sum you offer. On the one hand, you could demand that the current homeowner replace the roof before you move in. But you might be willing to take on this project yourself if the seller lowers the asking price significantly. At the very least, knowing about needed repairs should give you the upper hand when it comes to negotiating the sale price.
  5. Time frame. There are two things to consider during home shopping where the subject of timing is concerned: your time frame and the seller’s time frame. You might be trying to move in immediately because your lease is up. Or you might be willing to wait for the right house at the right price. On the other side of that coin, a seller may be keen to unload property because he has already purchased another home. Or he might be firm on his asking price and prepared to wait until he gets it. The time frame can affect your offer in either case. By hiring an experienced agency like David Painter Properties to help you with your purchase, you’ll get the expertise needed to help you find the fine line between offering too much and too little based on the information you have.

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