How to make a great offer on a property you want to buy?
A Real Estate Blog Article by Discom Realty
How to make a great offer on a property you want to buy – thanks for reading the Discom Realty blog article. We wanted to discuss several important factors when making an offer. Looking at these factors can really help you in the buying process of any property really. We are really happy you are taking the time to read this article – enjoy!
Did you know that making the right offer is crucial when you have your eye on an ideal piece of property? It is true, from a house that you want to call home or a piece of land that you want to build your dream home on. It matters to make a good offer that has thoughtfully considered.
So, let us look deeper a little deeper at the offer process. As many people may know, an offer that is too little, and you may get passed over for the next buyer. But a purchase offer is too much, and you may need to reevaluate your budget for furnishings or upgrades. Therefore, making a really good offer is a balancing act. And yes, this can be one of the most challenging parts of buying a new property.
Discom Realty wanted to share three things that can help you make sure you have a strong offer at a price you can afford. Here is when you might offer above, below, and at the listing price.
At List Price | How to make a great offer on a property you want to buy?
The property (either a house, land, or something else) is within your budget. Further, it is move-in ready if it is an existing structure or the land is cleared and ready to be built on asap.
A good ‘at list price’ for established structures such as a home that will come with all the amenities you want could be worth an offer at the listing price. But you will want to make sure there is not much competition for the property as in other offers pending. If this is the case, a Realtor with Discom Realty will talk to you about the pluses and minuses of getting into a bidding war with another buyer.
Below List Price | How to make a great offer on a property you want to buy?
When a property is ‘below list price’, you need to ask yourself this question: ‘Does the home need serious work?’ If the answer is yes, you may want to offer below the selling price. But in some cases, depending on the neighborhood and schools located in the area – this could be due to crime, poor school grades, or a declining home value in that area.
Let’s just say the property is a ‘fixer-upper’. In this case, bidding less money could free up cash for future repairs and necessary upgrades. Fixing a roof, a foundation with issues or a bathroom that still has that 1980’s vibe will cost you money. Even if you are a handy type of person, the cost of the supplies will still add up.
Here is one more example to look at. What if there are tons of homes listed in your area but little demand for them? You may want to try to come in with a lower offer and see what happens. Either way, a Discom Realty Realtor has got your back and can help you negotiate a better deal on your behalf.
Above List Price | How to make a great offer on a property you want to buy?
The third thing we really wanted to share with you was ‘above list price’ properties. In some cases, you may want to go beyond listing price if you are in a particularly active market or you know you’re up against several buyers. One of our experienced Realtors can supply a report to determine what other homes and/or land in the area are going for.
Looking at the information in the report, Discom realty can help you to make sure your best offer aligns with those bids. Furthermore, our Realtor will talk with the listing agent to see if all the other buyers have been pre-qualified.
Sometimes, a listing agent will jump at an all-cash offer over other types, therefore it is important to communicate how you wish to purchase the property in advance. This conversation can actually avoid a bidding war because the seller may like your terms better than the other buyers.
Are you ready for a new home in a better school district or are you ready to purchase a fun vacation home in Central Florida? Discom Realty is ready to help you make a good offer and to ensure you do not overspend. Reach out today, and our real estate team can begin looking for a property that is perfect for you and your family.
So, is the highest bid the best bid in the offer process?
An offer on a property you are looking to invest in brings you one step closer to the finish line in the home shopping process. But in some cases, the property will receive multiple offers from a range of bidders.
The highest bid is the obvious choice, right? Not necessarily – a seller is actually considering a lot of variables. Here is what the seller might be thinking about before moving forward on an offer:
Focus on priorities. A seller may have been thinking about this early on before any offers roll in. They could have made a list of what is most important to them in the sale of their property. Some things could include but are limited to:
- Having a tight moving deadline.
- Having serious financial needs and/or difficulties.
- Selling a recently passed family member’s property quickly for estate settlement purposes.
- Selling due to a messy divorce.
So, understanding the needs of the seller may help you jump into a property for a better-than-average offer. You need to talk to your Realtor at Discom Realty to see if there any requests that would make an offer a deal-breaker.
Reviewing the contingencies. A seller may look carefully at the bidders’ conditions for the sale. Common contingencies for potential buyers include a property appraisal and a home inspection. But sometimes, a bidder may request some other contingency that may be a deal-breaker and giving you a better offer position. Here is a list of common contingencies in a real estate transaction:
- Mortgage contingency.
- Inspection contingency.
- Home sale contingency.
- Standard disclosures.
- Natural hazards.
- Lead paint.
- Sold “as is” exemption.
Comparing earnest money amounts. A seller is always looking at earnest money. People who are interested in purchasing the seller’s home need to show that their offer is made in good faith. An earnest money deposit proves the buyer is serious about the transaction.
Real estate unfortunately has a lot of ‘wishful thinkers’ and ‘cheap skates’ as well. The more money you can put into the deposit, the more likely the seller will feel that you are to be able to back it up with financing.
Further, we recommend coming to the table with a pre-qualification letter from your bank. This can avoid going into a bidding war with another bidder that does not want to put up any earnest money.
Worried about unusual requests. It is not uncommon to learn that seller is concerned about weird or uncommon requests. A bidder could ask:
- The seller to make unnecessary repairs.
- The seller to leave all your appliances in the home for them.
- May ask to purchase the family’s pet with the property.
- May ask that the property is professionally cleaned prior to their arrival after the closing.
- May want a tree removed or landscaping work be done.
- The seller to leave the home fully furnished.
Even though the bidders’ offer might be high, if something unusual interferes with the seller’s top priorities, the seller may move to another bidder. We recommend that you talk to us about any requests and our Realtors will offer insights about them.
Together, we will carefully read over your requests and discuss any questions or concerns you may have for requiring these requests. In some cases, a request is actually not a bad thing, such as move-in dates. Some buyers need to move in early as their job requires it.
Other buyers want to know if it okay to start moving in personal effects prior to closing. If you have too many requests for the seller or if the seller is uncomfortable in the requests, it might be best to move on to another option.
Looking at the Home Inspection and what you need to know when making an offer.
Earlier in this blog article, we had mentioned the home inspection. Discom Realty felt it was important to really share more about this because it can affect ‘how to make a great offer on a property you want to buy.
To be honest, getting a home inspection can be nerve-wracking because who knows what the inspector will find. Sometimes, it is minor repairs, sometimes, it is major repairs, and other times there is nothing needing to be done – which is exceedingly rare.
If you are buying, you will want everything to be in great shape so you can move in quickly. A good inspection will help you determine if there are any hidden issues in the home. But seriously how much does a homebuyer really know about the home inspection process?
Discom Realty has four questions that you can ask yourself to help give you a better understanding of a home inspection. Here they are:
Is a home inspection always necessary?
Yes. A home inspection is not required — but it is highly recommended. In fact, every standard residential real contract in Florida has a provision giving the buyer an inspection period to determine if the property is acceptable to the buyer.
Your future dream home could look perfect on the outside but have underlying issues on the inside — like water damage or a faulty foundation. A home inspection is crucial because it can bring problems to light that otherwise would have worsened over time. Our Realtors at Discom Realty recommend that anyone buying a home or condo in Florida should get a thorough inspection before their closing.
What does a home inspector do?
An inspector thoroughly checks the safety and proper function of the property. This includes the heating and cooling systems, gas and water, electrical system, foundation, roof, and other features both inside and outside of the home. Here are some items a Florida Home Inspector Items your inspector will be looking at during your inspection.
Exterior Areas Reviewed:
- Garages and/or carports.
- Exterior doors.
- Drainage, grading, plants, and retaining walls.
- Wallcoverings, flashing, and trim.
- Driveways, patios, and walkways.
- Balconies, decks, steps, porches, and railings.
- Eaves, fascias, and soffits (if visible).
- Roof (including chimneys and other roof penetrations like skylights).
- Downspouts and gutters
Interior Areas Reviewed:
- Doors and windows.
- Garage doors and operators.
- Installed kitchen appliances.
- Walls, floors, and ceilings.
- Cabinets and countertops.
- Fuel-burning fireplace and stoves.
- Water heater.
- Fixtures and faucets.
- Sump pumps.
- Sewage ejectors.
- Drain, vent, and waste systems.
Electrical Items Reviewed:
- Service equipment, drops, grounding, and main disconnects.
- Service cables, entrance conductors, and raceways.
- Light fixtures, receptacles, and power switches.
- Overcurrent protection devices.
- Circuit interrupters.
- HVAC (heating, ventilation, and air conditioning), including thermostats, vents, distribution systems, access panels, insulation, and vapor retarders.
Who pays for a home inspection?
Typically, the buyer pays for the inspection because it is for the buyer’s benefit. Some sellers do a pre-listing home inspection, which the seller pays for. A pre-listing inspection can speed up the home transaction in some cases.
Remember that the cost depends on the home’s value and size, but don’t worry Discom Realty has numerous inspection companies that are highly rated. They are one call away and ready to go, if you need our help with that.
Do I have to be there?
It is recommended if you’re a homebuyer. But as a safety precaution, you may be asked to step outside or follow social distancing guidelines during the inspection. You can also tour the home virtually or talk over the phone with the inspector to discuss any questions you may have.
The Inspection Report
Depending on what turns up in your home inspection report, you will have a few options. If the home is in good condition and only requires minor fixes, you can simply move forward with the home purchase as planned.
If the home inspection report uncovers major issues. We will sit down with you to consider how serious they are. We will talk with you about if they are deal-breakers. If so, we will begin immediately to show you another home similar to the one inspected.
So, what is a Deal Breaker?
Discom realty wanted to share what a deal-breaker can be. Unfortunately, at times this does happen. First off, it is not possible to “fail” a home inspection, this is not an elementary school where everyone gets a letter grade.
But the inspection report could reveal major safety hazards or system failures. These can be deal-breakers, such as structural damage, major roof damage, or a broken water heater, that could be expensive to fix. In some cases, we recommend that you can ask the seller to make repairs or negotiate on the price to account for these issues.
If they refuse to budge and you have a home inspection contingency in your contract, you can walk away from the deal without penalty and get your deposit back.
Not all things are deal-breakers, maybe the kitchen cabinets are showing a lot of wear and tear. Or maybe there is an interior wall or carpet damage from family pets on the property. Some repairs are something you may need to repair or replace.
We recommend asking for a discount on the repair on the offer price. Therefore, it is important to assess your budget and desire to take on repairs. We have handymen and repair contractors available to meet and talk to you if desired. These conversations can help you consider having a contractor or a specialist come in to give you estimates to make an educated suggested offer price discount.
Thanks for reading this blog article that discussed – how to make a great offer on a property you want to buy. We hope it helped you get some real estate questions answered. Purchasing a home is probably one of the biggest life decisions you will ever make. Discom Realty understands this and ready to help you every step of the way. Call us today at 407-739-2833