How to Make Your Offer Competitive...And Stay Within Budget
In today’s landscape, crafting a careful, prudent offer can be the winning ticket to the home of your dreams. But how do you know what could make or break your proposal? Enter your real estate agent.
Understanding the market is one of the most critical factors to deciding whether you can afford your dream home. Ask your agent to run a Comparative Market Analysis, or CMA, to evaluate whether the home is priced appropriately in the first place and how much you should pay. This report pulls active listings and recent sales of properties with similar attributes to help determine whether the price you’re offering is aligned with the current market value of the home.
Another tactic is to do your research on the seller. The reasons that drive a home sale can vary tremendously. Your agent can connect with the seller’s agent to learn more about their motivating factors. Perhaps price isn’t the most important factor. Maybe the seller wants to close by a certain date, or there is another term that holds more weight than the price. Some sellers welcome letters expressing what you love about the home; others do not care for them.
In addition to doing your homework, you should also be prepared. Start your home search with a mortgage pre-approval and clear knowledge of the process and timeline – when a deposit is due and what it’s for, when your down payment needs to be delivered, what needs to be arranged in order to close on time, etc.
In a competitive market when properties are receiving multiple offers, limiting contingencies can increase the likelihood of your offer getting accepted. There are ways to do this without assuming additional risk. Work with your agent to try to schedule a pre-offer home inspection to allow you to waive the home inspection contingency and reduce additional negotiations throughout the process.
The bottom line is to use your real estate agent to guide you through the process – they have the industry relationships and experience to know what questions to ask and when to ask them. They want to help you find your dream home at a price point with which you feel comfortable.
