Make an Offer
You've
finally found the property you want to buy and it's time
to make an offer. Be careful not
to act hastily. Draft your offer carefully and exercise
good judgment. Here are some important steps to
follow:
- Act now. Assume there is no time to waste
in making your offer. You've invested time and energy in your
search for a home--now follow through. If possible, let the
sellers know they'll be receiving your offer shortly.
- Determine your offering price. You'll want to be aware of dynamic
market conditions, as well as property-specific factors contained in a comparative market
analysis (CMA).
The CMA is a tool for comparing the subject property with other similar
properties in the neighborhood. A well-prepared CMA is critical in
helping to determine the fair market value of the home (which may be
what you offer). Your real estate agent should have a form specifically
designed for this purpose. If during your property search you completed
the Property Comparison form, the CMA is practically complete. The CMA
will also include Listing Date, Listing Price,
Listing Expiration Date, Sale Price, and Sale Date, number
of Days on the Market. The CMA should include homes
currently for sale, home sold and homes which were listed but
didn't sell.
-
Protect yourself. Your offer should
contain financing and inspection contingencies for your protection. If
you're working with a licensed real estate agent, it's likely she'll be
using a comprehensive form which includes standard text
for virtually all normal contingencies.
- Think ahead. Now is the time to plan when
you want to close the transaction. If you're nearing the end of your
tax year, discuss with your tax advisor the best time to close. There
may be benefits associated with closing in the next tax year. Consider
closing near the end of the month. Pre-paid interest on your new loan
will usually be less. Coordinate closing with the closing of your
current home, or the termination of your lease.
-
Present your
offer. If you're working with an
agent, she'll likely present your offer for you. Letting her represent
you will help protect against emotional flair-ups which can occur in
face-to-face negotiations between principals.
-
Negotiate. Unless you're offering
the seller exactly what they're asking, prepare to negotiate.
A good real estate agent will be schooled in the art of negotiation and will employ important negotiation techniques while representing you.
Additionally, you can benefit by reading up on the subject. Local
and on-line booksellers will have many books on the subject from
which to choose.
