Home Buying Process: Submitting An Offer » Diane McConaghy Team

Home Buying Process: Submitting An Offer

WHAT ARE SELLERS LOOKING FOR IN AN OFFER: There are four main items that sellers typically look at in an offer: Purchase price. Earnest Money Deposit (or hand money), Closing date, and conditions. I’ll go into detail about each of these items.

OFFER PRICE: Let’s start with your offer price. Keep in mind that the asking price is not an indication of value. It is simply an arbitrary number. In some cases, the asking price is not even the end point but the starting point for offers. I understand everybody wants a deal but sometimes, the asking price is low on purpose, to generate multiple bids. And if you’re in competition, guess what? The seller will not bother negotiating with a low-ball offer. They will just take the best one.

EARNEST MONEY DEPOSIT: Moving on to your Earnest Money Deposit, also known as hand money. Sellers are more likely to accept an offer with a larger deposit because that speaks to the seriousness of the offer. A minimum of 1% of the purchase price should be enough but anything less than 3% will likely not win the offer in a competitive market.

CLOSING DATE: Be Flexible with your closing date. The closing date usually takes a back seat to the purchase price but in some cases, the sellers will require either a long closing or a short closing. The more flexible you can be with closing, the better your chances of acquiring the property, even if you don’t have the highest bid.

CONDITIONS / CONTINGENCIES: Lastly, you need to submit as clean of an offer as possible. The fewer conditions (or contingencies) you have in the offer, the better your chances. Conditions or contingencies are the items that your offer are dependent on. Examples of this are your mortgage contingency, appraisal contingency, home inspections, home sale contingency, etc. They are put in place to protect you and your hand money. In competitive markets, buyers tend to remove more contingencies in order to be more competitive. We can offer insight into these and whether you’re comfortable in removing certain ones based upon your individual situation.

One other item that some buyers find helpful is writing a letter to the sellers. However, many agents and sellers will not accept the “love letters”. We can offer some suggestions to help you avoid fair housing concerns. This was just a high-level overview of some of the decisions you need to make when submitting an offer. We will obviously go into much more detail with you so that you are well informed about each step in the offer process and ready to submit the strongest offer possible.

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