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How to Make A Purchase Offer

Before you make a purchase offer on the home of your dreams, ask yourself and your household members if this is the home for the next five years or more. Make sure everyone is on board with commitments to make it work, from putting off the dream vacation, to putting in the elbow grease to paint, do the yard work, clean the pool, etc.  

Next, sit down with your Berkshire Hathaway HomeServices network professional to craft your offer. They’ll pull up the most recent sold comparables (CMA) within a reasonable radius of the home, so you can compare other similar homes in terms of location, size, features, and amenities. 

You should also consider current market conditions, so you can choose the right offer strategy.  

In a buyer’s market, discounts are common because there are fewer buyers, more properties for sale, and home prices are soft or falling so offers under list price are common. In a seller’s market, homes sell quickly for full price or higher because there are plenty of buyers and few homes for sale. 

Your goal is to buy the home at a fair price, so when you make an offer, you want it to be accepted by the seller. Offering too little for any property is risky, as you don’t want the seller to feel insulted. The seller will probably respond with a still-high counter-offer. But, if the seller’s home is offered at a reasonable price, don’t waste time. Pay asking price or close to it. A home priced to sell will sell quickly and you’ll lose it to another buyer if you mess around. 

To show the seller you’re serious, include a copy of your lender’s pre-approval letter (with the dollar amount redacted), along with a cover letter summarizing your strengths as a buyer and why you love this home. Include a copy of the comparables you used to show how you arrived at your offer price. 

If your offer is conditional, such as your need to sell another home before closing on the seller’s, you’ll have to find a way to sweeten the deal, such as a full-price offer. Few sellers will accept both a discount and a contingency.  

Your real estate professional will help you draft the offer with a price, estimated closing date and terms, including earnest money (a guarantee that you’ll perform as a buyer in good faith,) final approval by your lender and your right to have a home inspection. Your earnest money check will be forwarded to the escrow agent when your offer is accepted. 

You’ll have a brief period to get your home inspections completed. Your home inspector will go through the home with you and point out the condition and potential lifespan of all systems and appliances. You should only renegotiate your offer when a problem wasn’t obvious before, or if an appliance, fixture or system is found to be unsafe or not functioning.

Once you and the seller have agreed to terms, your offer is now a binding contract and you’re on your way to owning a home!