Selecting Your Target & Making Your Offer
At this point we will work under the assumption that you have followed – to the letter – our other fantastic guidance.
You have used our formula to narrow your search to the homes and neighborhoods you can afford, you have used the tools provided to check out the neighborhood variables and potential and you have an awesome loan officer with a rock solid pre-approval.
You did do all of that right? Good.
Making the Offer
With the fact that you are generally prepared in mind, it’s time to dig deeper on the individual home you want to make the offer on.
Check Neighborhood Comparables
- What are the average sales prices for homes in the area with similar features and characteristics?
- What condition is the home in, and what repairs or improvements are needed?
- Are similar homes available at a more desirable price?
- How long has the home been on the market?
- Has the sales price already been reduced?
- Is the seller considering other offers at this time?
Your real estate agent will be able to provide you with answers to all these questions via a Comparable Market Analysis (CMA).
Lean on their data. Despite the public availability of real estate data, agents still get the best quality with the most frequent updates. Put them to work.
You will generally have to negotiate the offer. Another thing your real estate agent will handle and, assuming you did your homework when choosing them, be darn good at. The seller’s agent will counter your agent’s offer.
We will jump to the part where all parties are in agreement and you are officially under contract. Escrow is opened and earnest money is deposited.
The CLOCK IS NOW TICKING and you now have a finite amount of time to wrap your mortgage financing, homeowner’s insurance and other details up into a nice little package that gets fully approved by your lender. If you have listened and prepared in advance then you will be just fine.
If not… then I wish you the best of luck. You’ll be starting parts of the process that should have been completed long before the purchase offer was made. You are in for one helluva ride over the next few weeks trying to make up for lost time.
It’s better to be prepared.