Category Archives: house offer

How to Make an Offer on a House

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new home owner receiving key in hand after buying homeYou found the right house! Congratulations! Before you start buying new furniture or contacting a moving company, you need to make an offer on the house and make it yours.  The process of making an offer on a house and having it accepted can come with a million different questions; we’ve heard them all—and have compiled the most frequent into a list of answers. (You can also get the answers—and our expertise—in person. Just contact us.)

How much should I offer on a house? What is the right price to offer?

The right amount to offer on a house is dependent on your budget and the value of the property. Your real estate agent should be able to give you an idea of what the house is worth, based on comparable sales in the area. Basically, the worth of the property is based on the sales prices of other local properties with similar lot sizes and square footage.

There are a few factors to keep in mind as you make an offer:

  • A low-ball offer can offend a seller and lead to a more difficult negotiation (this doesn’t mean you shouldn’t make a lower offer, it’s just something to factor into your decision if you really want the property).
  • The amount the seller sees is the amount with all the “others” factored in. For example, if you make a full offer of $150,000 but ask for $10,000 to cover closing costs, the seller is going to look at the offer as $140,000 (not full price).
  • A large amount of contingencies or major contingencies can make a seller choose not to accept your offer. That doesn’t mean you shouldn’t include contingencies; it’s your right to include as many as you want.

What contingencies should I include?

The exact contingency or combination of contingencies a buyer includes depends on their exact situation. These are some of the most common contingencies buyers include in the offer:

  • Home inspection. This contingency gives the buyer the option to walk away if there is a problem found during the home inspection. If there is a minor issue, the buyer can request that the seller fix the problem. However, if the problem is more severe, like a bad roof or furnace that needs to be replaced, the buyer can opt out of the contract. This is a contingency that we recommend that every buyer include in their offer.
  • Financing. If the buyer is using financing to cover all or part of their home purchase, a financing contingency covers the situation where the financing would fall through before the closing. This contingency gives the buyer the chance to opt out of the contract.
  • Property sale. For buyers who have their home on the market and are making an offer on a new house, a property sale clause gives the buyer the chance to walk away if their home doesn’t sell.

What do I do if the seller does not accept my offer?

If the seller does not accept your offer, you have two choices. You can either make another offer or walk away. Your real estate agent can help you make the choice that best fits the situation, or set up showings for other properties that you make want to submit an offer for.