Buying a home is one of the biggest purchases you’ll make in your lifetime so putting in a perfect offer is the only way to get the best deal. If you’re like most people, you want the transaction to go as smoothly as possible. So before you put in your offer, consider these top 5 tips when it comes to making an offer on the home of your dreams.
1. SIGN A BUYER REP WITH YOUR REALTOR®
What’s a Buyer Rep? This 3-page document is required before putting in an offer on a house. By law, as real estate agents, we need the Buyer Rep Agreement (or, “Buyer Rep” for short) so it’s clear who is working for whom in your home buying transaction.
It’s an important document to include with your offer.
One item that is covered in your Buyer Rep is your agent’s commission. It’s the dreaded topic that nobody likes to mention but it’s very important. This is the amount that you agree upon for your agent’s sales commission after the transaction is complete.
The good news is that usually a large portion (if not all) of the commission is paid by the seller. You will see a specific percentage in your contract, or “AS PER MLS® LISTING”, meaning that it’s up to the seller to determine how much commission they pay out.
Next up, we’ve got something called The Holdover Clause. It may sound scary but it’s not at all. It simply means that if you are introduced to a property with your agent, but then decide not to buy it until after the Buyer Rep Agreement has ended, your agent is still entitled to get paid commission for X-amount of days.
In other words, your agent would still be given credit as your REALTOR® on that property, even though the agreement has ended.
Another important aspect of the Buyer Rep Agreement is Representation and Multiple Representation. Your agent may want to show you a house that they’re also the Listing Agent for. When real estate agents are representing both the buyer and the seller, you want it to be crystal clear that both the buyer’s and seller’s best interests are taken into consideration.
Your agent has fiduciary duties that they have to adhere to at all times. For instance, they won’t provide opinions on motivation or what you should offer or accept.
2. BE REALISTIC WITH YOUR EXPECTATIONS
These days, everyone wants a deal. Have you ever looked at a home that is priced $50k more than you can afford? Do you find yourself thinking “If it’s listed for $350k, I might be able to get it for $300-310k?”
The truth is, low-ball offers don’t work and this often starts the negotiation process off in a negative way. In these circumstances, the sellers’ backs are arched and ready to attack. It’s like a war of the egos.
So be realistic – know what your budget is and what value you place on the house you want to buy.
3. HAVE YOUR REAL ESTATE AGENT NEGOTIATE FOR YOU
A smart real estate agent is there to give you advice—advice on current market trends, economic impact on the housing market, and most importantly, advice on what the home is worth.
Over-priced houses, motivated sellers, and quick sales for financial reasons often change the way your agent will negotiate an offer. Trust their advice. They have a ton of experience getting their clients the best deal.Experienced estate list a home at its current market value. Therefore, when shopping for houses, your agent should be providing you with information on what a realistic offer for that home would be. This should based on the factors listed above.
If you’ve considered going it alone with a private sale, read our article entitled Why You Should Use a REALTOR® When Buying or Selling a Home.
4. CONSIDER THE ADDED VALUE
In the event you end up in a bidding war with other interested buyers, you may consider adding some more value to your offer. There are ways to make your bid look more attractive to the sellers.
You won’t know if your offer is the highest dollar amount being submitted, but you could suggest that you’re happy to close on the date the sellers want.
You might also forego an inspection or other conditions with your offer (with your agent’s advice of course) in order to seal the deal quicker and cleaner for the sellers.
For more information on different types of real estate offers, check out our article titled: Home Buyers Tip: The Difference Between a Conditional & Firm Offer.
These are just some tactics you might consider to put your offer in the forefront of the seller’s mind.
5. BE AS FLEXIBLE AS POSSIBLE
Remember, making an offer on a home usually involves of a back-and-forth approach. There needs to be some give-and-take between the buyer and the seller in order to come to an agreement.
By being flexible with what you’re asking from the sellers, and what you’re getting in return, the chances of making a deal are much more likely.
As your real estate agent we will work hard to negotiate on your behalf to ensure you’re getting the home of your dreams for fair market value.