Great job! You’ve discovered your ideal home. What’s next? Ultimately, the seller will side with the most competitive offer on the table.
The Most Important Step To Owning Your Dream Home
Preparation of your offer is key! The more attractive the buyer’s offer – the better chances of the seller accepting your offer. So, pay close attention to our guide.
How To Make An Offer On A House In A Competitive Market
The sale of the house will come down to the most attractive offer presented to the seller. Here we provide 11 fundamental tips to help you through this journey.
1. Obtain Mortgage Pre-Approval
Before you start house hunting, it’s important to obtain mortgage pre-approval. This will help you determine your budget and show sellers you are a serious buyer.
2. Minimize Contingencies
While contingencies can protect you as a buyer, they can also make your offer less attractive to sellers in a competitive market. Be reasonable and consider minimizing contingencies to make your offer more appealing.
3. Research Market Conditions
Research the current market conditions in the area you’re interested in. If the market is hot and houses are selling quickly, you may need to act fast and make a strong offer to stand out.
4. Present a Competitive Offer
At times, presenting an offer to purchase with a higher sales value seals the deal. It’s recommended to work with a reputable mortgage company to ensure that you are still getting a fair deal.
5. Offer More Earnest Money
Earnest money is a deposit made by the buyer to show they are serious about purchasing the property. Offering more earnest money can demonstrate your commitment to the purchase and make your offer more attractive to sellers.
6. Include an Escalation Clause
An escalation clause allows your offer to increase if there are multiple bids on the property automatically. This can help you stay competitive without having to revise your offer constantly.
7. Make a Respectable Offer
Lowball offers are the easiest way to have your offer rejected. Quite simply, lowball offers never work.
8. Be Flexible with Contingencies
If you include contingencies in your offer, consider being flexible with them. For example, you may be willing to extend the inspection period or waive certain contingencies to make your offer more appealing.
9. Present a Personal Letter
A personal letter can help you connect with the seller more personally and make your offer stand out. Consider including a letter explaining why you love the property and would be a great fit as the new owner.
10. Show Proof of Funds
Showing proof of funds can help demonstrate that you have the financial means to complete the purchase. This can make your offer more attractive to sellers who want to ensure the deal goes through.
11. Be Willing to Negotiate
Be willing to negotiate with the seller. While you want to make a strong offer, it’s important to be open to compromise and work together to reach a deal that works for everyone.
Work With Mortgage Professional
Masters Team Mortgage offers various options to help individuals achieve their dream of owning a home. Their exclusive in-house program provides more flexibility than traditional home loans, making it easier for clients to find the right loan for their primary home, vacation home, or investment property.
Additionally, the company is committed to finding the best interest rates and closing costs for its clients while also helping them overcome any obstacles that may arise during the loan process.
Frequently Asked Questions about Making a Home Purchase Offer
How do I make an offer on a house?
You can contact the property’s listing agent to offer the house. You can contact the homeowner directly, or your real estate agent can do it on your behalf.
What is the cost to make an offer on a house?
An earnest money deposit is required upon acceptance when making an offer on a house. The deposit ranges from 1% to 3% of the purchase price and shows your intention to follow through with the purchase agreement. It should be deposited into an escrow account and later applied to your down payment.
Is the earnest money deposit refundable?
You can get your earnest money back if the purchase agreement falls apart because of a contingency listed in your contract. If you sometimes back out of the contract for any other reason, you may lose the earnest money deposit.
Should you offer more than the asking price?
In today’s competitive market, many buyers offer and pay amounts significantly higher than the home’s asking price. Be certain that you stay within your budget to avoid financial strain should your offer be accepted.
What is considered a low-ball offer?
If you’re trying to purchase a house at a price significantly lower than the listing price, which is usually 25% or less, you’re making a lowball offer.
What is the percentage down payment needed?
The minimum size of your down payment depends on various factors, including your credit score and mortgage type. Homebuyers who receive VA or USDA loans can usually purchase a home with no money down. An FHA loan requires at least 3.5% down, assuming your credit score is 580. Conventional loans need at least 3% down, but you would need a stronger credit profile to qualify.
Masters Team Mortgage – The Masters Of Mortgages
Don’t hesitate to contact Masters Team Mortgage today to explore your financing options.
Services Offered by Masters Team Mortgage
FHA home loans are mortgages that are backed by the Federal Housing Administration (FHA). These loans allow borrowers to get low mortgage rates with a minimal down payment.
VA loans are mortgages that are guaranteed by the Department of Veterans Affairs. These loans offer exceptional benefits to military veterans, including low interest rates and no down payment.
The USDA Rural Development Loan is designed for those who want to buy a home in a rural or suburban area with no down payment and minimal investment.
A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. The maximum amount for a conforming loan is $548,250 in most counties.
If you need help with your down payment, you can get assistance through their down payment assistance programs.
Conventional loans are mortgages that are not guaranteed by the government. These loans typically require a higher down payment and credit score compared to other loan options.
Their in-house program and commitment to finding the best rates and closing costs make them a top choice for borrowers.