{"id":17423,"date":"2021-03-15T15:24:18","date_gmt":"2021-03-15T19:24:18","guid":{"rendered":"https:\/\/www.cubesmart.com\/blog\/?p=17423"},"modified":"2023-11-07T16:01:35","modified_gmt":"2023-11-07T21:01:35","slug":"buying-your-first-home-heres-how-to-make-a-winning-offer","status":"publish","type":"post","link":"https:\/\/www.cubesmart.com\/blog\/your-life\/moving\/buying-your-first-home-heres-how-to-make-a-winning-offer\/","title":{"rendered":"Buying Your First Home? Here\u2019s How to Make a Winning Offer"},"content":{"rendered":"\n
\"woman<\/figure>\n\n\n\n

Congratulations! You\u2019re finally ready to jump into the world of homeownership. Buying your own place can make a discernable difference in your quality of life, financial stability, and overall sense of wellbeing. But obsessing about more closet space or living room color schemes will not get you to the settlement table. You need to be well-positioned to make an offer that the seller will accept.<\/p>\n\n\n\n

The good news is that making an offer on a house these days usually doesn\u2019t require complicated negotiations going back and forth\u2014if only because this is most assuredly a seller\u2019s market. Record low housing inventory means that every buyer is competing with many other potential buyers to win sellers over. Of course, that\u2019s also the bad news, because there are not many bargains out there and house prices continue to rise with demand, says Amanda Albrecht<\/a> of Michele Morris Realty<\/a> in Plainfield, IL.<\/p>\n\n\n\n

For that reason, timing is everything, and a savvy buyer must be prepared to act swiftly (more on that later). Read up on these important tips so that when you find your dream listing you can make an offer that the seller won\u2019t be able to refuse.  <\/p>\n\n\n\n

Come with Receipts<\/h2>\n\n\n\n

It\u2019s always advised to work with a realtor or real estate\nagent but the most important thing a potential first-time homebuyer can do\nbefore even contacting a professional is to get preapproved for a mortgage,\nAlbrecht says. You want to know your price range before you start looking.<\/p>\n\n\n\n

However, Albrecht says the traditional debt to income ratio\nbanks rely on for pre-approval screening is probably not the most accurate\nguide for sensible budgeting in this day and age. <\/p>\n\n\n\n

\u201cOftentimes what the bank approves you for is about 49\npercent of your income which is quite high to spend toward your housing,\u201d she\nsays. \u201cWhen you\u2019re renting you\u2019re usually paying about a third of your monthly\nincome. So before you settle on a number, I would make sure you are really\ncomfortable with what that mortgage payment will look like.\u201d <\/p>\n\n\n\n

If you find that the mortgage preapproval sounds too high,\nadjust your price range accordingly before approaching a realtor. Remember,\ntoo, that real estate taxes will have to be factored into the home cost.<\/p>\n\n\n\n

Get Plugged In<\/h2>\n\n\n\n

It’s key to choose an agent who has been working in the\nfield for several years and has a good reputation. Putting in offers on houses\nis a nuanced, highly skilled process. Even if there is not a lot of\nnegotiation, there are still many factors to consider and many junctures where\nthings can go off track. Having an experienced realtor or real estate agent on\nyour side can be the difference between getting a yes or no.  <\/p>\n\n\n\n

Not only will a seasoned professional understand the particulars\nof the market, the neighborhood and the psychology of sales, but they will also\ncome to the table with a network of industry connections. This matters that\nmuch more in a competitive landscape like this one. You want someone who can\nget you an appointment to see the listing as soon as possible, who can get the\nseller\u2019s agent on the phone when needed to answer any questions, and who has\nthe clout and trust to get the deal done. An agent who has been in the field\nfor some time will also have good referrals to reputable vendors such as\ninspectors and contractors.<\/p>\n\n\n\n

Be Decisive<\/h2>\n\n\n\n

Given the conditions of the current market, and the lack of available homes for sale, buyers need to move quickly once they see something they like, Albrecht says. For example, a recent listing she posted at seven a.m. had 10 showings booked in the first hour. By the end of the day, 30 people had seen it, with eight making offers. <\/p>\n\n\n\n

This kind of pressure to act can be a challenge for anyone, let alone a first-time buyer\u2014it\u2019s not easy to make big decisions on the fly, especially when it might be the biggest purchase you\u2019ve ever made. Unfortunately, Albrecht has seen too many clients learn their lesson the hard way, losing out on a desirable listing by hesitating to act. While there may be some exceptions, in general, you can assume that what you see listed on the internet today may very well not be on the market tomorrow.<\/p>\n\n\n\n

\u201cWe\u2019ve seen people whose parents have told them \u2018no way do\nyou have to make an offer that fast\u2019 because the market really wasn\u2019t that way\nwhen they moved forty years ago,\u201d she says. \u201cBut then our client might lose out\non three or four homes. By then they are frantic, and they are ready to be\nserious.\u201d<\/p>\n\n\n\n

Name Your Best Price<\/h2>\n\n\n\n
\"couple<\/figure>\n\n\n\n

For many people, exactly how to bid on the house<\/em>, the\ncold hard numbers aspect of the offer can be uncomfortable. Remember that your\nagent is there to guide you. In some ways, the current conditions should put\nyou at ease, because there is not much room for haggling with sellers these\ndays. In previous times you might have been able to start a bit lower than the\nasking price, but that is not the case right now when the rule of thumb is to give\nthe seller what they want or more.<\/p>\n\n\n\n

If you know that the house will be going into a bidding war, or auction, with multiple buyers vying for it, you will have to give a final offer by a deadline. In this case, there are no counter offers\u2014just the seller choosing the buyer with the most attractive offer. To give yourself an edge you might consider including an escalation clause which essentially tells the seller you will pay x amount above the highest bid. <\/p>\n\n\n\n

Paying in cash can be another way to get a seller\u2019s\nattention. That lets your seller know your deal is not contingent on bank\nfinancing or loans or appraisals\u2014you can close immediately, and the deal will\nbe completed as soon as possible. Given that the most common reason real estate\ndeals fall through is financing issues, a cash offer simplifies matters and can\neven seem more appealing than a higher offer to some sellers. <\/p>\n\n\n\n

A final way to use money to up the ante is to consider making a bigger earnest money deposit. The earnest deposit is the amount of money that accompanies your offer. Typically, it\u2019s about five percent but the more you put down, the more serious you appear to be about your offer. Some people even offer to make it nonrefundable.<\/p>\n\n\n\n

Sweeten the Deal<\/h2>\n\n\n\n

You don\u2019t always have to use money to lure the seller. One way is by being flexible with your closing date. Your seller will likely be tied to their next mortgage closing date. If you\u2019re moving out of a rental property or a family member\u2019s house, you might not have to move on one specific day. The easier you can make it on them, giving them the timeframe they might need, the better it is for your chances of winning the house.<\/p>\n\n\n\n

If the proposed closing date puts you in between a lease and your signed mortgage, you might need to take advantage of self-storage for your personal belongings<\/a>. A flexible month-to-month contract<\/a> is ideal for stowing away items until you gain ownership<\/a> of your new house and can move in.<\/p>\n\n\n\n

Another seller-friendly approach is to waive all\ncontingencies, or make a \u201cclean offer.\u201d Contingencies are stipulations in the\noffer for closing the deal. These can include very standard items such as home\ninspection and appraisal or less standard items such as asking the homeowner to\ninclude furniture. In the past, buyers would expect the seller to address\nneeded repairs recommended by the home inspector. While asking less of the\nhomeowner is wise in this market, skipping over the inspection can be much riskier\nfor the buyer. <\/p>\n\n\n\n

One way to avoid this is to keep the inspection but instead\nof asking the homeowner to cover repairs to ask for a one-year warranty which\nwill cover anything that happens in the first year. This can be an inexpensive\nway to keep a cleaner offer. <\/p>\n\n\n\n

Another thing that was standard in the past that is simply not done in today\u2019s real estate market: asking a seller to pay for closing costs. Don\u2019t do it, Albrecht says. Make sure to factor in closing costs to your own budget.<\/p>\n\n\n\n

Don\u2019t Get Emotional and Stick to the Basics<\/h2>\n\n\n\n

Some real estate websites suggest writing a letter to the\nseller to ensure your offer is accepted but Albrecht says that particular\ntactic is no longer as effective as it used to be. <\/p>\n\n\n\n

\u201cIt\u2019s supposed to pull on the heartstrings but actually we\nhave seen recently that it is starting to have an opposite effect. Our seller\nwith the eight offers didn\u2019t want to read the letters. It was a business\ntransaction\u2014he didn\u2019t want an emotional sale. He wanted to pick the best\noffer.\u201d<\/p>\n\n\n\n

What\u2019s more important is that your offer contains all of the\nnecessary paperwork, with all of the necessary documentation and signatures.<\/p>\n\n\n\n

Keep Your Money in the Bank<\/h2>\n\n\n\n

No matter how excited you may be about moving into your dream house and its color scheme, don\u2019t start shopping for furniture, appliances, or even power tools just yet. In fact, if you\u2019re making an offer on a home, now is not the time to go making any big purchases on your credit cards. Don\u2019t charge anything that will affect your ability to get the loan completed. <\/p>\n\n\n\n

Get Ready to Move!<\/h2>\n\n\n\n

Once your offer has been accepted, start preparing for the big day<\/a>. If you\u2019ve held your belongings in storage, now is the time to ready them for moving to your new home. Or if some of your belongings don\u2019t fit in the new home but you\u2019re not ready to let go of them, consider investing in a unit to store them for the time being. We can also assist you with packing supplies<\/a>. Pro tip: you can never have too many!<\/em><\/p>\n\n\n\n

For as rattling as the home buying, packing<\/a>, and moving process can be, try to keep calm and remember that this is all a means to an end. You\u2019re making a long-term investment in your future and no matter where you end up living, it will be yours to love, cherish, and decorate.<\/p>\n","protected":false},"excerpt":{"rendered":"

Congratulations! You\u2019re finally ready to jump into the world of homeownership. Buying your own place can make a discernable difference in your quality of life, financial stability, and overall sense of wellbeing. But obsessing about more closet space or living room color schemes will not get you to the settlement table. You need to be […]<\/p>\n","protected":false},"author":16,"featured_media":17424,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-17423","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-moving"],"yoast_head":"\r\nHow to Make an Offer on a House | CubeSmart Blog<\/title>\r\n<meta name=\"description\" content=\"Buying your first home and want to make the winning offer? 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