New Year, New Home? Understanding how to make an offer on your dream home will be key to getting the best deal possible. And we’ve got the “how-to” guide just for you; and there’s only easy steps to follow. We’ll outline them below.
#1: Get Pre-Approved
First and foremost, step number one should always be getting preapproved. Getting pre-approved is the real deal, especially if you’re serious about purchasing a home.
A pre-approval letter is a statement from the lender that you qualify for a specific mortgage amount based on an underwriter's review of all of your financing information ( credit report, pay stubs, bank statement, assets, salary, etc).
Having that pre-approval letter puts you at an advantage when dealing with a potential seller, as he or she will know you're ONE step closer to getting an actual mortgage. In addition, it will help you beat out the competition, negotiate with power, and let you know how much you can afford so you can start saving for a down payment!
What do you need to get preapproved? Here’s a quick overview of some items you’ll need to gather:
- Pay stubs – last 30 days
- W2s – last 2 years
- Federal tax returns – last 2 years, all pages and schedules
- Bank statements – Last 2 months, all pages
- Realtor and attorney contact info
- Copy of photo ID – must be legible
#2 Find Your Dream Home
Buying a home will be one of the biggest financial purchases of your life. Having a Real Estate Agent by your side will be extremely beneficial. Not only will they be able to help you find the perfect home, but they’ll be able to negotiate the contract and terms as well as make a competitive offer that is within your budget.
Need help finding a realtor? Send us a message or give us a call (833)345-1234 – we know a lot of local realtors in the states we are licensed in and we are more than happy to help connect you.
Don’t forget to create a list of all your wants and needs in a home. Download our Home Comparison Checklist to take with you as you go to Open Houses. This checklist identifies important factors to consider when choosing a home. It will help you to evaluate the features of up to 3 homes in a side-by-side comparison including tings like neighborhoods, the layout of each home, home exterior, utilities and maintenance. Click here to download your free checklist.
#3 Research, Research, Research!
Did we say research? Make sure to do you research. Your Real Estate Agent will have access to information about what homes have sold for in the past to ensure you don’t over pay. You can also research the home listing to see how long it has been on the market for. If it’s been on the market for quite some time, there may be room to negotiate a lower offer. Speak with your Real Estate Agent! Also, if you’re buying a property with HOA fees, find out if the average annual dues increase. It’s important to know how much you’ll owe so you can factor that into the affordability of the house.
#4 Earnest Money Deposit
Earnest Money deposit, also known as a good faith deposit, is a sum of money you put down to demonstrate your seriousness about buying a house. In most cases, it acts as a deposit on the property you're looking to buy. You deliver the amount when signing the purchase agreement or the sales contract. Speak with your EHL Loan Officer for more information.
#5 Consider Contingencies
When buying a home, certain conditions must be met by the buyer or seller before closing. They offer protection to the homebuyer. The seller can request concession in the home price negotiation process as well. Contingencies include things like:
- Home Inspection
- Home Sale
#6. Making an Offer
Your real estate agent will write you offer and submit to the seller’s agent which will be presented to the seller. In you offer make sure to include contingencies, waived contingencies, earnest money amount if applicable, property address, buyer, and seller names, offer price, down payment amount, list of fees and closing costs, date you would like to move into the home, etc.
#7 The Waiting Game
Once you make an offer on a home, the waiting game begins! If the seller accepts your offer as-is, the purchase and sale agreement becomes legally binding! Congrats on your new home.
Keep in mind these scenarios as well:
- The seller can also reject the offer you made without a counteroffer. They do not need is disclose to you the reason why either.
- If the seller makes a counteroffer, you can either accept it, decline it, or counter their counteroffer.
Be sure to speak with your Real Estate Agent so you can come up with the best course of action!
#8: Home Inspections Matter!
A home inspection is very important when buying a new house. A home inspection will come after you’ve made an offer which the seller has accepted. Getting an inspection ensure you know what condition the house is in to avoid costly surprises down the road. While it varies by state, here are some things inspections generally look for:
- Plumbing/electrical issues
- Roof condition
- Exterior rot or decay
- HVAC/heating system issues
- Structural concerns (like foundation)
#9. Congratulations On Your New Home
If the seller accepts your offer, your contract will then be finalized. Each party will then sign the sales contract. The Real Estate Agent will also provide your Loan Officer with a copy of the sales contract and an appraisal report will be ordered. Soon you’ll be moving into the home of your dreams.
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