1. Get pre-approved
Before writing an offer – and ideally before you even begin your search – meet with your bank or other financial advisor; the one who will be giving you your mortgage, and get pre-qualified or pre-approved. When it’s time to put forth an offer, the seller will know it’s serious.
As you can see by reading other posts on my blog, I often refer Monica Jones with RPM Mortgage as excellent Certified Mortgage Planner. You can actually apply for your pre-approval online at MortgagesByMonica.com.
2. Understand the local context
List prices are often subjective. Look to your Better Homes and Gardens® Real Estate sales associate to advise you on pricing strategy. In the end, it’s important that you know the real estate situation yourself to determine if the property is fairly priced, based on comparable, recently sold properties. There’s no rule of thumb that says going in under asking is expected. Market conditions will dictate the selling price. Keep in mind that homes will also occasionally be under-priced to attract multiple offers. This circumstance may call for a bid over the initial asking price.
3. Understand and adjust to the seller’s interests
Asking the right questions prior to writing an offer can often make the difference between an accepted offer and a stalled negotiation. Some contract terms may be of great significance to the seller, whereas only a slight inconvenience for you. Should the seller want to rent the place back, for example, for a few days or weeks after escrow, your written flexibility on the move out/in date could close the deal in your favor.
4. Make a strong deposit part of your offer
You’ll want to submit an earnest money deposit when writing an offer, payable to a reputable escrow company, to be delivered by your agent no more than three business days after the acceptance of the offer. Even when delivering an offer below asking price, offer a large deposit if possible, and it will pay dividends in the end. Down payment strategies however may vary. In some areas, a smaller deposit is the norm. Regardless of location, a higher deposit will most likely strengthen your negotiating power.
5. Provide an appropriate time for the seller’s response
Time is of the essence once you decide to take the plunge, especially regarding a newer listing in which the risk is high that other buyers will potentially submit offers. Typically, the seller is given until 5PM on the third day from receipt of the offer to respond, unless you write in a different date and time. If the offer is strong, speed up the response time. Your Better Homes and Gardens Real Estate sales associate can advise you on what strategy will work best.