House hunting can be an enjoyable experience – it’s fun to attend a private showing or an open house and walk through each home, imagining you and your family living in its spaces.
Once you manage to find the perfect place however, things begin to shift drastically. It’s now time for you to make an offer and actually buy the home, before someone else does.
While your real estate agent can help you with this part, knowing how to make a strong purchase offer will increase your chances of success. Here are a few tips:
Determine the price
If you already have an ideal purchase price in mind, put it in writing. In a typical market with normal conditions, you’ll want to name a price that is a bit lower than what you expect to pay. You can ask your real estate agent for advice, but don’t expect him or her to pick a price for you.
Make an initial deposit
Most states require buyers to make a good faith deposit, so they can have a binding purchase offer. It could be in the form of cash, personal or cashier’s check, or other modes such as mortgages, personal or real property, or unsecured promissory notes. Be sure to indicate who will be in charge of holding the deposit, which can be anyone but the seller.
Disclose your down payment
Readily available cash is the most common form of down payment, but you can also use real estate, stocks, promissory notes, or other assets. In some states, verification of a buyer’s down payment is required within a certain period.
Include financing terms
Keep in mind that your deposit should be equivalent to the total consideration paid when added to your down payment and financing. Include the type of financing you hope to obtain, whether it’s conventional, VA, FHA, assumption, contract of sale, or other. Also include maximum points, if you expect the seller to pay them.
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