This Article Is About Home Purchase Offer With Contingencies By Buyers

Once home buyers have picked out the home that is best suited for them, 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 loan originator and get pre-approved
• A pre-approval is different than a pre-qualification.

Importance Of A Solid Pre-Approval Prior To Home Purchase Offer

A pre-approval is when a loan originator will process the file as follows:

• review loan application
• run credit
• review credit scores
• review credit report
• review credit history
• review two years income tax returns
• review two years of W-2s as well as review most recent paycheck stubs
• run 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 loan officer to see if they are qualified for a home loan:

• 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 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 wants 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

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
• Sellers do not want a home buyer who is a weak home buyer where the 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
• Sellers will be the person who will accept the home purchase offer
• Most home sellers will go with the person they feel best comfortable with

Most sellers do 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, buyers do not want to give a low ball offer either
• It insults the home seller
• They decide not even to accept an offer from buyers with low ball offers
• Sellers expect 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 comparable sales

Most sellers have been educated by their listing real estate agents on the highest value their home will appraise for and what price to accept.  With the proper home purchase offer and reasonable contingencies, both the home buyers and home sellers 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
• This holds true especially on multiple offer subject properties

Negotiation Process

Unless the home is hot and freshly listed, buyers never want to make a home purchase offer at the full listed price.

• Buyers also do not want to write a low ball home purchase offer either where sellers slam the door on them and tell them never call them again
• Speak with a real estate agent
• See what the comps are in the neighborhood and present a reasonable purchase offer

This process makes go back and forth until a compromised price is reached.

Earnest Money With Home Purchase Offer

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, buyers may consider a $5,000 earnest money deposit.  Earnest money deposits are totally refundable if the buyer decides not to go through with the real estate transaction within the contingency period or in the event borrowers get a mortgage loan denial.