Making an Offer on a House Tips | 4 Mistakes to Avoid
Why is it important to know about tips on making an offer on a house? Being well informed can prevent mistakes from happening. In addition, can help you win your dream home when other circumstances might not be in your favor. Let’s admit, not everyone has $350,000 in cash to shell out for a house. Here we will talk about the entire process and 4 mistakes to avoid so you can win your dream home! We will talk about:
An offer without multiple offers.
What happens if you are in a multiple offer situation.
What to do after you’ve made an offer.
Time frames for a regular sale, Short sales and Foreclosures.
Watch the full video here:
Making an offer on a house without multiple offers
First thing you should do is get a pre–approval letter that already has gone through underwriting. This is a more solid pre-approval than if it hasn’t gone through the lenders legal department. Let your Realtor know so they can then communicate to the seller’s agent this detail. Make sure to use a local mortgage lender. Using a bank or an internet company usually means the customer service will suffer because the lack of communication. This may eventually prolong closing and make you super nervous with the lack pro-activeness. Remember that a local mortgage lender has your best interest. They get paid when the deal is done. They are not paid an hourly wage like bank employees or internet companies with 1-800 numbers. This is the most important step and is the foundation of a solid deal.
Second thing you should do is to Clarify. Ask your agent to call sellers agent to ask what does the sellers ideal offer look like? Questions like, when do the sellers want to close, what contingencies make them feel uncomfortable.
Submitting the Offer:
In Florida, washers and dryers aren’t standard in the contract. Therefore, you must add them into the contract if you want them and sadly, many Realtors overlook this. Make sure your Realtor includes the washer and dryer into the offer, if applicable. If the washer and dryer are not in the home on closing day, closing may get delayed. Buyer and Seller must come to an agreement or buyers may be left without a washer and dryer.
If you are selling your home you currently live in now, have proof that you are under contract on your current home by submitting offer with the contract agreement that is under contract.
Shorten time periods with: escrow length, inspection length and maybe closing date(if that’s what the seller wants, it may not always be the case, some sellers need more time)
Raise the earnest money deposit amount. Give the sellers confidence that you are serious and really want the house. $100-1000 just won’t cut it, consider offering $3-5000.
Emotions: Write a personal letter about what this house means to you and your family and how grateful your family would be to be able to move in.
What happens if you are in a multiple offer situation
There’s not much time to waste, this home will be more than likely be under contract the next day, so let’s act fast.
Submitting your offer:
Consider increasing your offer.
Limit the number of contingencies and consider not using a contingency to sell your home in the contract. This means that you are telling the seller that you can only buy their home if yours sells. I’ve known many sellers throughout the years that declined offers like this even when they didn’t have another backup offer or multiple offers on the table.
Make the time frames as short as possible for everything. Inspection period, close date (if seller wants this), escrow period.
If you know you are up against a cash offer, remember that many cash offers may be investors that end up offering a lower amount because they want a good deal. Don’t be discouraged.
In a multiple offer scenario, the seller’s agent may reply and say, “give us your highest and best” or “highest and best due by specific date”. When that happens, you have a choice to leave it at your current offer or raise your offer a bit more to get the competitive advantage.
What to do after making an offer on a house tips
There are 3 ways this can go:
They’ve accepted your offer as you presented it – you then have on average of 2-3 days to submit your escrow money deposit.
They countered back with a new price and new conditions – after this you then have 3 choices: accept their new price and new conditions, counter, or reject the offer and move on.
Or they rejected your offer – you can then move on to other homes.
You are under contract once you receive the sellers signed agreement. The moment this contract, signed by all parties, and is received in your agent’s inbox, marks the beginning of your executed contract.
Time frames, including Short sales and Foreclosures
So, you’ve decided to place an offer and are wondering what happens after an offer is accepted on a house and how long after making an offer on a house do you hear back? This varies on what type of sale and if there are multiple offers.
For a regular sale of a home you can expect them to hear back within 24-72 hours or 2-3 days. Sometimes you will hear back the same day.
For multiple offers, things usually move pretty fast but can also vary between that same hour or 72 hours or same hour to 3 days.
For a short sale you might not hear back for weeks or even a few months. Your agent will communicate this to you. It seems crazy but the bank is trying to work on an amount with the homeowner and if there are multiple liens and encumbrances involved this timeline can take very long.
For a foreclosure you might not hear back up to an entire week. With most foreclosures, the bank has total ownership of the home already and are motivated to get their inventory (the home) off their hands to recover costs. Most of the time they don’t recover their costs.
Top 4 Mistakes to Avoid when making an offer on a house tips
Pre-approval amount – If you are pre-approved for $300,000 and you are bidding on a home that is $250,000, do not submit the pre-approval that says you are pre-approved for your entire amount. You don’t want to show all your cards, the proper way to do this is to have the lender adjust the letter to reflect exactly what you are offering.
Know your market – have your Real Estate agent draw up a comparative market analysis so you are aware of what this home current market value is. Submitting a low offer is not smart, as this will insult the seller.
Using the agent selling the home as your agent. This is equivalent as hiring the lawyer that is suing you. He is representing the seller and does not have your best interests at heart. They many times have a history of working together or a good relationship.
Getting emotional – don’t get your hopes up by being attached right away. Pace yourself and be aware of the emotions that roll in. This will help you substantially.
In conclusion, I hope that these making an offer on a house tips help you to be prepared to make an offer for your future home purchase. Whether you are buying a home, selling a home, thinking of moving to the Orlando Area or just browsing, make sure you get the latest market updates, tips on selling, moving hacks and so much more by following Krish on YouTube, Pinterest, Facebook, and Instagram.