How To Make Home Purchase Offer?
Once you have picked out the home that is best suited for you and your family, the next step is to write a home purchase offer on the home. If you chose a home that is hot and have multiple home buyers interest in the home or a home that is perfect for you and it just came on the market, do not give up so easily. There are methods of getting the winning bid by following certain tips. The first step in the home buying process is to consult with a mortgage loan originator and get pre-approved. A pre-approval is different that a pre-qualification. A pre-approval is when a mortgage loan originator will review your mortgage loan application, run your credit, review your credit scores, review your credit report, review your credit history, review your two years income tax returns, review your two years of W-2s as well as review your most recent paycheck stubs, and run your mortgage application through Fannie Mae Automated Underwriting System and get an approve/eligible per DU FINDINGS.
Choosing The Right Home
Many home buyers first consult a mortgage loan officer to see if they are qualified for a mortgage loan and some may not be qualified and take them some time to get their credit and finances in order. This may take a few weeks or months. Once they are solidly pre-qualified and pre-approved, they are so eager to go out and write up a home purchase offer. Unfortunately, home shopping for the right home is not that easy. Unless the home buyer builds a custom home, finding the perfect home with the perfect layout, square footage, and lot size can take weeks or even months or longer. I have run into cases where a mortgage loan applicant was solidly pre-qualified for a home loan but took them six months to find the right home for them. When the right home comes along, the home buyer want the home no matter what but may face multiple bidders or the home seller may not want to budge on the selling price because the home might be fresh on the market. There are ways of making sure that your home purchase offer gets accepted without having the highest bid.
Home sellers do not necessarily go for the highest purchase offer. Home sellers want to make sure that the home buyer has a solid pre-approval and that the home will close without 11th hour last minute hiccups. There are many times when a home seller will accept a lower price home purchase offer than the highest home purchase offer on the table. Home sellers do not want a home buyer who is a weak home buyer where the mortgage loan commitment will not be an issue or that the home buyer will change their mind. A solid home purchase offer will get you ahead of other home bidders. Here are a few tips on getting the winning bid on a real estate home purchase offer.
Interact With Home Seller If Given The Opportunity
When you view the home and if the home seller is there, try to interact with the home seller. If they have children, talk about the school system and your kids as well. If they are animal lovers and you own pets, talk about pets. The home seller will be the ultimate decider of who to sell the home to and will be the person who will accept your home purchase offer and most home sellers will go with the person they feel best comfortable with and not always take the real estate agent’s recommendation.
Home Purchase Price
As mentioned earlier, the highest bid is not always accepted. A poorly qualified home buyer can place an offer that is higher than the list price but what good does that do if they cannot get financing. Again, on the flip side, you do not want to give a low ball offer either where it insults the home seller and they decide not even to accept an offer from you. The home seller is expecting the best and highest price for their home but they also want to make sure that the home purchase transaction goes through and closes. An offer over the list price can be risky to the home seller as well if there are no comparables. Most home sellers have been educated by their listing real estate agent on the highest value their home will appraise for and what price to accept. With the proper home purchase offer and reasonable contingencies, both home buyer and home seller should be happy with the home purchase offer.
Solid Pre-Approval Carries Weight
Make sure that you have an updated solid pre-approval letter with the subject property address that is recent. Do not present a pre-approval letter that is old and handwritten. Offer the listing agent the loan officer contact information and offer them that they can contact the loan officer who issued the pre-approval. Many veteran seasoned listing agents will actually not just accept the pre-approval letter but will also interview the loan officer who has issued the pre-approval letter as well, especially on multiple offer subject properties.
Unless the home is hot and freshly listed, you never want to make a home purchase offer at the full listed price. You also do not want to write a low ball home purchase offer either where they slam the door on you and tell you never call them again. Speak with your real estate agent and see what the comps are in the neighborhood and present a reasonable purchase offer. This process make go back and forth until a compromised price is reached.
A large earnest money deposit provides that the home buyer is serious and proves strength on the home buyer. Instead of a $1,000 earnest money deposit, you may consider a $5,000 earnest money deposit. Earnest money deposits is totally refundable if you decide not to go through with the real estate transaction within the contingency period or in the event you get a mortgage loan denial.