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Six Mistakes to Avoid When Making an Offer To Buy

July 9, 2010

 NW Philly Home

You’ve shopped for a home, and found the one that you want. Your Buyer’s Agent is ready, anxious, to prepare the Agreement of Sale.  She wants to know your terms.   

You want the house, but you don’t want to pay too much. And yet, if  there happens to be more than one offer, you want yours to be the one that is accepted. Nothing is more frustrating than making an offer that the Seller turns down, or that falls apart in negotiations. 

When making your offer avoid these common mistakes.

  1. Choosing a price without doing enough research. Get information on comparable sales from your Buyer Agent. They will tell you whether the seller’s asking price is high or low or right on the money. Find out how many similar properties have sold recently, (past 6 months) near the home you are considering. This information will help you decide what you should offer and whether you can go lower, or need to go higher than the asking price. Making an uninformed ‘low-ball’ offer will irritate the Seller and the Seller’s Agent.
  2. Not paying attention to the Seller’s non-price needs. A winning offer in not always the higher one, it is the one that comes the closes to meeting the Seller’s needs including the price. Has the seller already purchased another property and needs a quick settlement, or are they waiting on the completion of new construction and need a longer settlement? Can the seller do some needed repairs, or do you need to make an offer where you will be responsible for repairs?
  3. Choosing a discount mortgage company that you found on-line or was recommended by your brother-in law who live 1,000 miles away. Use a local mortgage broker with a good reputation in the area, or in the mortgage specialty which you need. Your Buyer Agent and the Sellers Agent will interview your mortgage officer. They are looking for confirmation that you are a good candidate for the loan. They are also looking for confirmation that this mortgage officer is going to be able the get the job done on time and without unneeded complications. Agents recommend mortgage officers based on past performance, if your Agent has recommended someone, you should at least check out that person before you select a lender.
  4. Providing inadequate or confusing financial information. The financial information which you provide needs to create a clear picture. The Seller’s agent will check this information to see if it makes sense. The mortgage that you are applying for, and the income you have disclosed, and your cash on hand need to add up to your offer and closing costs. When you are paying cash, be ready to provide a copy of a recent bank statement showing proof that you have the funds on hand that you need for the purchase.
  5. Not being ready for some negotiation. To get what you want there may be something that you have to give up. When you are prepared to compromise, the Seller is more likely to compromise. If you get stuck think of a different approach to the situation, or look at it from a different point of view. Some of the most difficult situations arise over small things, such as the seller has agreed to your price, and then won’t budge over the hour of the closing. Why does this happen? Because one side feels that they have ‘given enough.’ Keeping things ‘even’ goes a long way to avoiding these tense situations.
  6. Working with an inexperienced Buyer’s Agent. Experience teaches Buyer’s Agents how to turn your offer into a winning presentation. She knows what it should look like when it arrives gets to the Seller’s Agent. She knows how to make it easy to say, “Yes.” to. An experience Agent will help you with any special tactics that can help in certain situations, such as the escalation clause the help you win when there is competition, but only if used correctly. If your Buyer’s Agent is new, she should have a team or mentor to help her through any unfamiliar situations.

 

Ask me a question. I have closed agreements for my Buyers for 20 years.

Kathleen Sheridan, Realtor®   

WEICHERT, Realtors® – McCarthy Associates

ksheridanrealtor@gmail.com

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3 Comments leave one →
  1. July 10, 2010 1:38 am

    nice post. thanks.

  2. July 13, 2010 10:25 pm

    Hi Kathleen,

    Great post – solid advice and great use of imagery! You should share this with anyone who’s in the market to buy 🙂

    • July 14, 2010 8:56 am

      Hi Ricardo,
      Thanks for all your help. Your training for real estate agents is the best.

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