Making an Offer on a Home for Sale

So you have found the perfect house out of all those homes for sale, and it feels like it was meant to be your new home. The next step for you is to make an offer, which can seem like a leap into the unknown at first. But your Realtor will be able to advise you regarding the true real estate values in the area, which is an essential tool in making a successful offer. It is the real estate agent's job to help guide you in coming up with a figure to offer the seller and to use their skills at negotiating the best possible deal and outcome.

It may not go as quick and simple as you may like. In fact, most home offers go through a back and forth negotiation process, which is why it is ideal to have a Realtor knowledgeable in real estate sales and the art of negotiation working for you and your bottom line.

The Typical Offer on a Home:

• You place an initial offer: You discuss with your real estate agent what the best price you should offer is to allow some room for negotiation but still be a viable offer to the seller. Your Realtor will research and create a Comparative Market Analysis (CMA), which will show you what similar homes for sale in the area were listed at and what they have sold for. This should give you a price range to place your offer. The figure you offer is your decision but base that number on the facts of what the home is truly worth as well as trying to get the best possible deal. The offer is usually written in the form of a sales contract and will be drawn up by your agent. Most sellers will not take an offer seriously unless you are pre-approved (you have a letter to send along with your offer from a bank or financial lender estimating how much they will lend you) for your mortgage.
• The seller responds: Your initial offer will usually include a date and time for the seller to respond by, varying from a few hours to a couple of days. The timeframe may differ depending on how aggressive your offer is. The seller’s response could be accepting your offer, or making a counter-offer, or rejecting the offer completely with no counter-offer for you to consider. In the case of bank owned homes, the seller is actually a financial institution that is looking to make a certain amount on the property to recoup their losses. This may mean they require a larger down payment from you, a letter of pre-approval from your bank or lending institution and you may learn there is less wiggle room in the price tag. You can do an inspection on a foreclosed property, but often it is for your own informational purposes, as they are not typically going to allow further negotiation on the price and they are not in the business of repairing homes.
• Negotiations if the seller counters: If your original offer is met with a counter-offer, the seller usually wants something closer to the asking price or to adjust the timeframe on closing. Your real estate agent will negotiate through this process with your guidance and on your behalf. Until there is a signed agreement by both seller and , either party may walk away from the deal at any time.