You’ve searched for weeks and finally located the perfect house for you and your family. Unfortunately, your work isn’t over yet. You still have to convince the owner to sell it to you at a price you can afford.
Don’t despair, however. With a little research and an informed strategy, you can drastically improve your chances to move in to your dream home.
You have to start somewhere
Obviously, the amount you initially write into the contract has a great influence on whether the seller looks favorably on your offer. How do you come up with that figure? There are several factors to consider.
Determine how the home compares to similar properties in the area. The most reliable way to make this evaluation is to look at homes that sold recently in the same neighborhood. Texas Realtors are a great source for this information, as they have access to multiple listing service data that includes sales prices.
Is the home bigger or more updated than the average house on the street? A house with a remodeled kitchen, an extra 500 square feet or a new roof will fetch a higher price than the average house in that neighborhood.
It’s not just the money
Most sellers have a number in mind when perusing offers, but there are factors beyond price that influence how they view your proposal – factors that you can control.
- Get pre-approved for a mortgage. Being pre-qualified is swell, but being pre-approved means that your lender has committed in writing to lending you a certain amount of money. That kind of commitment shows sellers that you’re serious about buying their home, and you can pay for it.
- Be ready to pull the trigger. A seller may need to close quickly or remain in their home for an extended period of time. If you can meet his timeline, your offer gains strength.
- Avoid contingencies, if possible. Maybe you can’t close the deal until your current home sells, but each special request negatively affects your chances. A seller presented with several offers will likely choose the one with the fewest strings attached.
It depends on the market
Until you get a response from the seller, you never know if your initial offer will be accepted. And if it’s not and the seller submits a counteroffer, the real work begins. Deciding how to respond to a counteroffer is one of the hardest parts of purchasing property.
If it’s a buyer’s market, you may have some leverage and can stand firm on your initial offer. On the other hand, a seller might be able to command his asking price – or even higher – in a seller’s market. Knowing what shape your market is in will help you figure out an appropriate response.
Also, consider how much you really want the home and how much you can spend. If your initial offer was a stretch for your budget and the counter didn’t reduce the price significantly, it may be time to move on. However, if you’re in love with the house and were simply looking for a better deal, it may be worth trying again.
Regardless of the seller’s response, don’t take it personally. Reaching an agreement on the price of the home is strictly a business negotiation, not a reflection of your appeal as a buyer.
Many things combine to make an attractive offer. Your Realtor can help you determine how to put together an offer that gives you the best chance of getting the home you want at terms that are favorable to you.
Whether you're interested in buying your first home, your next home, or just want to know more about home-ownership in general, I encourage you to check out a couple of great online resources: http://www.texasrealestate.com/ or http://www.har.com/ and for all of your Pearland TX and Northern Brazoria and Galveston County real estate needs, please visit my site at http://www.danfrankrealty.com/. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.
Danny Frank is a local Pearland TX Real Estate expert! You can see my entire blog at http://www.pearlandrealtyblog.com
My column was also published in the 19July09 edition of the Galveston County Daily News