July 26, 2023

Tips for Making Your Best Offer on a Home

Although the housing market's 'unicorn' years have passed, it is still very competitive in numerous areas due to the limited supply of homes for sale. If you plan on purchasing a home this season, it's important to realize that the peak of bidding wars is over, but you could still encounter some multiple-offer situations.

In order to ensure that you make a strong offer on a home, it is recommended that you seek the assistance of a real estate professional.

1. Lean on a Real Estate Professional

Trust in a reliable agent who can assist you in achieving your goals and provide valuable insights into the current housing market. Agents possess extensive knowledge of both local and national trends, and they will utilize this expertise to ensure that you are well-informed and confident in your decisions.

It's important to work with a real estate agent when buying a home. They have knowledge of successful purchases in your area and can advise on what sellers are looking for in an offer. By catering to a seller's needs, your offer has a better chance of standing out. Forbes has published an article on this topic.

"Getting to know a local realtor where you’re hoping to buy can also potentially give you a crucial edge in a tight housing market."

2. Get Pre-Approved for a Home Loan

Forbes has published an article on an important topic regarding home buying. It recommends getting pre-approved for a home loan to have a clear budget in mind, especially with the current affordability challenges. Working with a lender to get pre-approved will give you a better understanding of your borrowing capacity and increase your financial confidence. Additionally, it shows sellers that you are serious about the purchase.

3. Make a Fair Offer

It’s only natural to want the best deal you can get on a home. However, submitting an offer that’s too low does have some risks. You don’t want to make an offer that will be tossed out as soon as it’s received just to see if it sticks. As Realtor.com explains:

“. . . an offer price that’s significantly lower than the listing price, is often rejected by sellers who feel insulted . . . Most listing agents try to get their sellers to at least enter negotiations with buyers, to counteroffer with a number a little closer to the list price. However, if a seller is offended by a buyer or isn’t taking the buyer seriously, there’s not much you, or the real estate agent, can do.”

The expertise your agent brings to this part of the process will help you stay competitive and find a price that’s fair to you and the seller.

4. Trust Your Agent’s Expertise Throughout Negotiations

It is important to trust your agent's expertise during negotiations when purchasing a home. In the past, some buyers have opted to skip home inspections or forgo concessions from the seller in order to secure the winning bid during the peak housing market. This was discussed in an article from Bankrate.

“While the market has largely calmed down since then, sellers are still very much in the driver’s seat in this era of scarce housing inventory. It’s not as common for buyers to waive inspections anymore, but it does still happen. . . . It’s in the buyer’s best interest to have a home inspected . . . Inspections alert you to existing or potential problems with the home, giving you not just an early heads up but also a useful negotiating tactic.”

Fortunately, today’s market is different, and you may have more negotiating power than before. When putting together an offer, your trusted real estate advisor will help you think through what levers to pull and which ones you may not want to compromise on.