Education and news for smart DIY landlords!
In a previous article here at Landlord Prep, I’ve taught you how to get over the blues of losing your dream home. In one of the tips there, I suggested getting back at house hunting when you’re done brooding.
But getting back in the house hunting business isn’t easy especially if you haven’t learned the tips on how to secure your dream house. This is a followup to that article. Here, you will learn how to make a good offer that will increase your chances of signing a purchase contract.
In making an offer, setting your buying price is the most important part of the negotiation. Getting a lender’s pre-approval will help you set a good price range. Home sellers will take you more seriously when they see your offer and the pre-approval amount.
When you get your pre-approval amount, answer the questions, ”How much do houses sell in this area at this time of the year? Can your pre-approval amount afford it?” This is one way to avoid bidding wars by hitting that right amount that the seller wants.
A seller will always have a reason for selling a home. They might be doing it out of a rush or just to change residences. Whatever their motivations are, learning these will help you think of an offer that they’ll accept or find hard to refuse.
Even a new or perfect home can offer you a bargaining chip. Good examples are location and the distance to schools and markets. You can offer to buy a property less because it’s far from public facilities which increase gas costs.
If you’ve found a target home, you can ask your agent to look for similar homes in the area at a low price. The data collected will make the home seller rethink their initial price or counteroffer and compromise for a lower sale price.
Houses will always have issues, big or small. You don’t want to buy a house with an underlying problem or might change your mind. That’s why you should set contingencies in case you decide that the house isn’t worth buying. A common contingency is a house inspection.
Timelines are important too if you want to box out any other bidders and prevent them from taking your dream home. In your offer letter, try to set a timeline where you and the seller should close the deal. Make the timeline long enough for both of you to make good offers that would appease both sides.
There might be a change in the local market price or a structural problem that appeared after the home seller accepted your offer. If this happens, don’t hesitate to change the offer you made and ask for renegotiations on the price or repairs.
Other sellers are sentimental to their homes to the point that they would not look for the highest bidder but with the most gentle soul. If you understand this type of seller motivation, you can get on their good side by handwriting a letter. This will assure them that the person they’re selling their house to will take good care of it when they leave.
Making a good price offer to a house seller isn’t hard if you study the local market hard and know your budget. You can also shut out other bidders and remove competition by offering a good deal with a deadline. But the most important tip of them all is to win a house seller’s favor by understanding their motivation for selling. Then present them an offer that they’ll like while not compromising your goals as well.
Make every house hunting successful by staying ahead of other homebuyers. All you need to do is read these blogs: