Home Buyer & Home Seller Guide

You have just found a house, that you feel comfortable with and are ready to make a home offer. You want to be sure that the home offer you make is accepted and at the same time does not stretch you out and offers you room to breathe. The question is, how do you do this? Making an offer on a house can be a tricky. Prior to making an offer on homes. there are a lot of things that you will need to consider and once the offer is made you will also have to prepare to negotiate in the event of a counter offer made by the seller.

Making An Offer On A Home – Considerations

When making an offer on a house, there are certain factors you must taken into consideration in order to ensure you get the best deal.

How Much?

When considering the amount of money to offer a seller, it may be useful to consider some of the below mentioned points:

• Inquire as to what properties in the neighbourhood have sold for or are selling for. This will give you a fair idea of whether the seller is over or under charging.
• While looking at the median of selling property prices, this will also give you an idea of the how hot or cold the market is. If there are a number of sales in the market and in quick succession of each other you will know that you may need to act fast or lose out to a more willing buyer. On the other hand however, if the sales are few and far between it would mean that you have time to bargain.
• Check the interiors of the house to make sure that it doesn’t have any structural or major damages. This would mean you having to mend the house or carry out interior renovations to make it habitable.
• You may also want to check if the house has the additional features that you want. E.g. A lawn or a studio or a granny flat etc.

Having considered the above make sure to check your finances prior to making a home offer.

Contingencies

When making an offer on a house, be sure that you include contingency clauses in your offer. Do not make an unconditional home offer without certain clauses being satisfied, such as, the house passing certain inspection levels, or your application for finance being approved. Usually contingencies have a time frame of 30 days.

Counter Offers On A Home

Now that you have made a home offer, the seller in most circumstances will come back with a counter offer on the home. This is basically where the seller will accept certain terms of the offer and negotiate or want to change other. The biggest haggling point is usually price. Other issues included in a counter offer could include settlement date, contingencies in the contract etc. If the seller is dissatisfied with the price, you could be rest assured that he/she will reject your offer on the spot. The seller may also come back with the counter counter offer. This process will basically continue until a consensus has been reached and the terms are universally acceptable.  Once the terms have been agreed upon, the two parties enter into an unconditional contract that encompasses the agreed terms.

Once a home offer is made, you can retract it right up to the point where the offer is accepted. If it has been accepted, it creates a legal and binding  obligation on both parties and either party breaching could be liable for a law suit and any damages a court may deem fit. Hence prior to making an offer on a house, make sure that you are completely satisfied with all the terms.

References:

1. The Basics of Making an Offer – Realtor.com
2. Making an Offer on a House – NOLO