Four Tips for Making an Offer

Reprinted from FreddieMac site

By HomeSteps SVP Chris Bowden on September 6, 2016

The good news for today’s homebuyers is that we’ve gone back to a more traditional market, after being dominated by investors and cash sales for several years. Nearly 68 percent of homes sales are to individual buyers today, compared to 53 percent in 2011 when investor/cash sales reached their peak. This means more opportunities for first-time homebuyers and growing families to make an offer on a house they can afford – provided they have the patience and know-how.

At HomeSteps®, the real estate sales division of Freddie Mac, we evaluate thousands of offers a year. This has given us a lot of insight into what to do and what to avoid when buying a home, which leads me to four important tips to keep in mind when making an offer in today’s market:

Understand how much you can afford. While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer. It will not only help you determine your price limit, but it will also help you understand if your budget can cover a new roof or furnace in the home you may be considering. You also need to understand whether or not you are financially prepared to cover monthly expenses for general upkeep and utilities, which can run hundreds of dollars per month.
Act fast. Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country. For example, in Denver about half the homes listed sold in 30 days or less in April 2016. So the sooner you can make an offer, the better. Getting pre-approved is key if you know you’ll need a mortgage to buy since it will help you act fast and make a confident offer.
Make a solid offer. Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford. Always ask the seller for a home warranty as part of your initial offer. That way, you’ll be covered if appliances or mechanicals fail or break down after you’re in the home.
Remember, in a competitive market, your offer may be one of many. To make yours stand out, you may want to include one thing in your offer to set you apart from the competition – like a letter to the seller or the ability for the seller to rent back their home for some period of time after closing. This can be your chance to connect beyond just dollars. Talk to your agent about other ways to make your offer resonate on a more personal level.
Be prepared to negotiate. It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford. Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.
Once you’ve signed the purchase contract, always get an independent home inspection, so you know the true condition of the home. If the inspection uncovers undisclosed problems or issues, you can typically re-negotiate the terms or cancel the contract.

If you’re making an offer on a real estate owned (REO) property, keep in mind that when you are buying a home from banks and institutions, you will be more successful if you make your best offer first. While they can and will negotiate, they typically employ local pricing strategies with the goal of selling their homes at or near current fair market value. In addition, you need to take into consideration that most REO homes are sold “as is” so it’s important to do your due diligence once you’ve signed the contract.

With these four tips in mind you will be better prepared to make a successful offer. You may even want to start your search at HomeSteps – we have affordable and repaired homes available across the country just waiting for an owner.

About marilynsellshollisterrealestate

I am a native Californian born in Los Angeles and have resided in San Benito County since January 30, 1959. I attended the University of Southern California. I am a licensed Real Estate Broker, license #00409787, active for almost 45 years. I started my career in 1972 and still am totally committed to the highest level of service to my clients. I am currently associated with Intero Real Estate Services. I am Past President of the San Benito Association of Realtors, serving in the role on numerous occasions. I was a Director of the California Association of Realtors for over 18 years, having served on numerous committees. I also served 2 terms representing the California Association of Realtors at the National level, NAR. I am a certified SRES (Senior Real Estate specialist), since 2005. My community involvement has included membership in the Hollister Rotary Club, serving as their first woman President in 2002. In the late 1960's, I became a member of the El Torillo Chapter of Children's Home Society, and served as President, and was also President of the Tri-County Council of CHS, which is today Kinship Center, and I am currently a Senior Active. I am a member of the San Benito Chamber of Commerce. From 2002-2008, I served on the Board of the Hollister Downtown Association and was their President from 2006-2007, and still serve on sub-committees of this organization. And, I am currently serving my 3rd term on the Community Foundation. My record of performance and my reputation have made me who I am in the industry. I am a household name in San Benito County, when you think of Real Estate. My name is recognized not only in Hollister, but in our neighboring counties, Monterey, Santa Cruz and Santa Clara counties. I have been involved in land development, marketed several subdivisions, sold ranches, commercial leasing, bank-owned properties, short sales and own a Property Management Company, Hollister Rental Properties, for more than 35 years. I am proud of my sales record and for the majority of my career I have been in the top 1% of major Real Estate Companies including Van Vleck Realtors, Cornish and Carey, Contempo, Seville-Contempo, Century 21, Coldwell Banker and finally Intero Real Estate services for the last 15 years. Using my skills in negotiating, mediation and transaction closure, during 2010 and 2011, I was involved with the City of Hollister's First Time Home Buyer Down Payment Assistance Program. The program was the City's Redevelopment Agency, under Bill Avera, with the assistance of CJ Valenzuela who was working with the County of San Benito. CHISPA, a non-profit, was responsible for restoring homes to equal to new condition that the City had taken back in foreclosure, or that they had acquired. When the homes were restored, we put them on the Multiple Listing Service and we went out and promoted the City's Down Payment Assistance Program. Buyers were screened and qualified by our preferred lenders. I facilitated workshops for First Time Buyers explaining the programs. I negotiated the contracts for the City of Hollister and with the Buyers. With this program, I closed 2 homes in 2010, and 4 homes in 2011. On a personal note, I am married to Richard Ferreira, a retired General Contractor/Developer. We have a combined family of six daughters, six grandsons and 3 granddaughters. We share commons interests in travel, movies, entertaining, and Richard has picked up my love of cooking. Our spare time is spent with family and enjoying our grandchildren.

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