Tips For Making An Offer To Buy A Home

So what are the next steps you need to make to try to secure this home? You will need to make an offer. An offer is a legally binding contract, which must be in written form. Verbal agreements are not sufficient!

When submitting an offer, most buyers include a certified check, called Earnest Money.


Earnest Money
For the seller to know you are serious about the offer, it is customary to include a deposit or good faith money (a.k.a. Earnest Money). Few offers are accepted without earnest money. The amount varies but 5-10% is usual.

Typically the money goes into an escrow account, which earns no interest. The earnest money is often then used as part of the cash down payment given to the seller. The earnest money is returned to the buyer in the event the seller pulls out of the deal. If the buyer pulls out of his agreement, the seller is allowed to keep the money.


How Much Should an Offer Be?
Most homes sell for an average of 5-7 % lower than the asking price. It might surprise you to know that many sellers refuse to hear future offers from buyers that submit “low ball offers” to them. A home is their investment and when a seller feels cheated they often make the mistake of doing business emotionally and not intelligently. A reasonable low offer will sometimes come back with a counter-offer. Offers that are excessively low, often insult sellers and can end, or damage all future dialogs. How much you offer should be dependent on many things. Do you want to offer above or below the asking price? Maybe you are thinking of offering the asking price. The main resource to determine an amount to offer is to use comparable sales in the area. As your agent, I will review what similar properties in the area have recently sold for. With this information we can decide on what amount an offer should be.

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