The Right Way To Make an Offer on a Home

Protect yourself by having a professional agent on your side

 

The Tip:

Making an offer on a house is complicated and legally binding, so don't go into it alone. An experienced real estate agent will save you time and keep you from overpaying for your home. 

It's the biggest first step you'll ever make—in real estate, anyway. Making an offer on a home makes just about everyone a little nervous, so here's some advice on making the process as smooth as possible.

Step 1–Get the Price Right

It's a classic misconception that you can save money on an agent's commission by handling the offer on your own. But a good agent's knowledge and experience can actually save you thousands on a home purchase. 

For example, your agent can provide you a comparative market analysis on listing prices and sales prices for homes in the neighborhood of the one you're planning to purchase. If, for example, homes are selling for 5% less than their listing price, you can reasonably offer 8–10% less than the listing price, leaving yourself room to negotiate. 

Be sure, however, to listen to your agent's advice. If the market is slow, you could offer less, or, if it's a seller's market, you could be quickly outbid. 

When you've settled on a price, you'll make your offer using a standard purchase agreement that complies with the laws of your state. The agreement will include everything from the property's address and the price you're offering to details about who will pay for title insurance and inspections, and any state-required information. 

Your offer is a legally binding contract—another good reason to work with a pro. A mistake in this document can cost you big.

Step 2–Negotiation

The seller can accept your offer as is, but that rarely happens. Sellers usually counteroffer by changing or adding to the terms of your offer. Your agent will help you understand how the counteroffer affects you, and, if necessary, develop a counteroffer of your own. 

You'll be in a strong position to negotiate if you:

  • Are a cash buyer.
  • Are pre-approved (not pre-qualified) for a mortgage.
  • Don't have a house that must be sold before you buy.

Until both sides sign the agreement, either can reject the offer, ending all negotiations.

Work with the Best

This is a life-changing business transaction, so be sure you have a competent, trustworthy agent on your side. Our real estate Endorsed Local Providers are experts in your market who will be sure to get you the best deal possible.