Are you ready to make an offer on a house? Here are three tips for making an offer on a house. In a competitive market you have to make a strong offer for it to be accepted. Especially when you’re in a multiple offer situation, you have to make sure that your offer stands out. The good thing is, that it doesn’t always have to be about the highest price.
Offer Tip #1 – Get Pre-approved.
Contrary to popular belief pre-approved and pre-qualified are not the same. When you are pre-qualified, a lender just looked at your credit. With a pre-approval, a lender actually has looked at your credit, verified your income and has seen your debt to income ratio, which is really important to in order for you to get a mortgage.
However there is another level that not all mortgage companies can provide, but that will make your offer stronger than anyone that you’re competing with! This is when the lender has already underwritten the mortgage and all that the mortgage company is waiting for is an address and an appraisal. That means you’re not just pre-approved you are actually approved. All you need is the address! The underwriter has already looked at your file and approved you for a mortgage. It also means that you can close faster, sometimes in less than two weeks.
Think about it. If you are a seller, which offer would you go with? Somebody who is pre-qualified? Somebody who’s pre-approved or somebody who’s already been underwritten? The choice is pretty clear.
Offer Tip #2 – Find Out What The Seller Really Wants.
What is most important to the seller? If you think that it’s always the highest price, you would be wrong. Most sellers are looking for the highest net price. That means sales price – any seller contribution closing cost. That means a lower offer with less closing cost could actually beat out a higher offer with more closing costs.
For some sellers the closing date can be a hot button. Maybe they already have a house under contract and they need to move fast. Or maybe they are building a house and the house is not going to be ready for a couple of months. That means that they may want to move the closing date out a couple of months.
Or maybe they want a couple of days to move out after closing. You really do not know what’s important to the seller until you ask. I always make it a point to talk to the listing agent to see what the sellers hot buttons are.
Offer Tip #3 – Always Include a Due Diligence Period.
The Due Diligence period is a period of time where you can inspect the house and discover any problems that may exist with property. Do not EVER waive the inspection! I do not care how much competition there is, you always want to do an inspection on a house. Yes, that means new construction as well.
Inspectors will see things that you and I, or even your cousin or other family member might miss. They’ll find safety issues and large ticket items that need to be repaired or replaced before you move in. You can ask the seller to repair those items that are important to you. Or you can even walk away from the transaction and get your earnest money back. The due diligence period is for your protection and it can save you from a lot of headaches.
When you are making an offer on a house, be sure to keep these tips in mind. Want more tips, be sure to download my FREE Buyer’s Guide!