With the right approach you can make an offer that’s be hard for a seller to turn down, while at the same time ensuring that you don't pay more than the home is worth.
1. Get Pre-Approved for a Mortgage
If all else is equal, sellers are more likely to accept an offer from someone who is pre-approved for a mortgage as opposed to an offer from someone who is not. This is especially true in a seller's market where the seller is likely entertaining multiple competitive offers. In this scenario, mortgage pre-approval can go along way toward setting your offer apart since it gives the seller important peace of mind. Even more than a pre-approval, you can work with a Penrith mortgage consultant to become a Certified Buyer, which puts you in a stronger buying position.
2. Consult Your Realtor
Before you make an offer on a home, you should always consult your realtor first. Your realtor will be able to help you perform a competitive market analysis (CMA) in order to determine the property's true value. Once this value has been determined, they will be able to help you pinpoint an offer that is strong yet fair.
A good realtor will work with you throughout every step of the home buying process, learning more about you to help find your ideal home. They will also work with the seller and their realtor to come up with an offer that everyone can agree to. Research your realtor beforehand to ensure you can trust them. This will help you feel confident in giving them the space needed to properly represent you, getting you a more positive outcome.
3. Write the Seller a Letter to Form a Personal Connection
Selling a home is unlike selling anything else. Even sellers who are very motivated to sell their home can still have a strong personal connection to the home that are selling. In other words, most sellers want their home to go to a buyer who is going to value and appreciate it.
With that said, making a personal connection with the seller is a great way to strengthen the attractiveness of your offer. Take the time to write them a letter to go along with your offer. Tell them why you love the home and why you are excited about the possibility of living there. If you make a personal connection and an emotional impact with the seller, they are a lot more likely to recognize and remember your name as they are sorting through offers.
4. Don't Let Your Emotions Get the Best of You
While it's a great idea to form an emotional connection with the person who is selling their home, you need to be sure to keep your own emotions in check throughout the process. Buying a home is an investment and no investment is worth over-paying for. It's great to fall in love with the home that you are making an offer on, but you shouldn't let your love for a home push you into making an offer that is well above the appraisal value. In the end, the home that you select may be a largely emotional decision. How much you offer for that home should be calculated, logical, and fair.
5. Offer More Earnest Money
Earnest money is money that is paid to the seller when the offer is made in order to protect them in case the person making the offer backs out. It is typically about 1-3% of the home's purchase price. If the seller accepts your offer, the earnest money is put towards the cost of the home. If they decline your offer, your earnest money is sent back to you. The only way the buyer loses their earnest money is if they back out after their offer has been accepted. If you are serious about purchasing a home, though, there is no risk in increasing the amount of earnest money that you offer the seller and offering more earnest money is a great way to let the seller know that you are making a serious offer on their home.
Making an offer on a home can be a tricky process. With the right approach and preparation you can make a competitive offer that stands out from the others a seller may be considering. By doing your research on the home’s value, building a connection with the seller, and trusting your realtor, you’ll strengthen any offer you make on your journey home. While this does not guarantee your offer will be accepted, it gives you enough of a competitive edge to stand out.
Contact your local Penrith mortgage consultant to get pre-approved and begin your journey home.