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The offer is a critical part of the home buying
process. It's when you, as the buyer, say to the
seller: "Here's what I'm willing to pay for this
house."
This home buying guide will explain the five factors
of a smart offer.
1. Base the offer on hard evidence
Before making an offer, you should have a good idea
of the home's estimated value. This knowledge will
come from understanding your market conditions and
knowing what comparable homes are selling for in
your area.
Making a realistic offer will increase your chances
of acceptance, while preventing you from overpaying.
If you agree to a price higher than the home's
value, and the subsequent home appraisal comes in
lower than that price, you'll have trouble getting
financing. That's time wasted!
2. Make the offer contingent
It's a safe practice to make your offer contingent
on two things -- loan approval and inspection. Even
if you've been pre-approved by a lender, there's a
chance you could get turned down for the actual loan
(especially if the price you agree to pay is higher
than the pre-approval amount).
The home inspection is also critical, because you
won't know the true "health" of the house based on a
casual walk-through. Only a qualified home inspector
can dig up the facts. Your offer should be
contingent on both of these things.
3. Set a time limit
The last thing you want to do is sit around
wondering when you'll hear back from the sellers (if
at all). For this reason, it's common practice to
put a time limit on a home buying offer. It shows
the seller you're serious and prevents the process
from dragging on. Some buyers limit their offer to
24 hours, some for 48 hours, and others even longer.
It will depend on your comfort level and unique
circumstances.
4. Hope for acceptance, but plan for everything
Of course you want the seller to accept your offer.
But there's always a chance they won't, so you need
to have a plan in place so you can react quickly.
Discuss this with your agent before making the
offer. Have a plan for three different scenarios --
an acceptance, a rejection, and a counteroffer.
5. Know your limits
If you've been pre-approved for a certain loan
amount by a mortgage lender, then you have a pretty
good idea of your limitations. Be careful making
offers that exceed your pre-approval amount (unless
you can make up the difference in cash).
Keep this home buying guide in mind when making
offers. Practice the five factors of a smart offer.
Good luck and happy home buying!
* Copyright 2006, Brandon Cornett. You may republish
this article if you keep the byline and author's
note, and also leave the hyperlinks active.
Learn more!
This
home buying guide was brought to you by
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http://www.homebuyinginstitute.com!
Article Source:
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