First time home buyers: How to make an offer
October 10th, 2010
You’re buying your first home and you want to make†† sure you make an offer that is right for you!
Of course the first step is to determine your budget. Will you be making an all cash purchase? How much cash will you be able to put down? How much of a mortgage will you need from the bank? Have you been pre-approved for a mortgage?
Most first-time home buyers have no idea what to expect. And that’s to be expected. Thus my recommendation for working with a professional and experienced real estate agent†– whether you’re buying your first home or your tenth.
A good real estate agent will help you throughout the entire transaction and the offer is critical. You can make an informed decision on the seller’s asking price by reviewing recent, comparable sales in the area, the market, and other variables by working with your agent.
Based on many factors, no two home purchases are alike. This information will help you to be well positioned in making a “smart offer” on the home you want to purchase.
I use the term “smart offer” because too often people get carried away with “the bargain.”
I had a client who made a $900K offer on a $1.6M home which I advised him against and of course, he lost the home. When we found him the next apartment, he listened to my advice and made a “smart offer” which saved him over $300K with various negotiations.