Once you have found the home you love, next comes making the offer. For obvious reasons this is an important step in the process. Offer too high and you may pay more than necessary for your home.
Offer too low and someone else may make a better offer and you lose out on your dream home. Or as often happens with really lowball offers, the seller is insulted and no longer willing to work with you.
Luckily, there are a number of tools available that will allow me to research the value of the home you are interested in and see what the real value is on the market. I can pull the tax records and see what the buyer originally paid for the home, I can see what comparable homes (comps) have sold for in the area, and I can see what other homes in the area are listed for. I can also see if the price has been reduced, how long the home has been on the market, and a plethora of other data that allows me to help you choose an offer price.
Great Homes Move Fast
Great homes and great deals don’t last long. A well built, well maintained and well priced home will often sell within a week of being listed, even in a slow market. There are buyers looking for homes in metro OKC every single day and when a cream-puff home shows up on the market, Realtors are quick to show it to their prospective buyers. If the home is priced right it will sell quickly, often attracting multiple offers. To win these types of homes requires decisive action. You need to have your financing pre-approved and be ready to make a strong offer. Unfortunately, great deals don’t come along every day. Remember to stay focused on finding the home that works for you at a fair price.
Lowball is Noball
In my many years of experience, really low-ball offers just don’t work. Sellers are very sophisticated and with the plethora of information available to home sellers, they know pretty closely what their house is worth. Unless you are dealing with a short sale or foreclosure, you typically won’t find sellers willing to sell their house cheap. Normally what happens when buyers make low-ball offers is that the seller is insulted and either won’t respond at all, or will become very difficult to negotiate with. You are much better off to make a realistic offer and negotiate a price and terms that work for both parties.
Offers Must be in Writing
In Oklahoma, all offers to purchase real estate must be in writing. The offer must list the legal description of the property and contain detailed terms of the offer. I use standard forms developed by the Oklahoma Real Estate Commission for making offers. I will work with you to help you decide on the price you want to offer and the terms you want to offer. Once we have written an offer and you have signed it, I will present it to the listing agent, who will then present it to the seller.
Typically you will want to provide an earnest money check to show that the offer is serious. The offer is legally binding you to purchase the property at the terms listed in the offer. The seller can either accept the offer with no changes, in which case we now have a binding contract to purchase, or the seller can make a counteroffer, which you can either accept, decline or once again counteroffer. This continues until either both parties come up with a mutually agreeable contract to purchase, or one of the parties declines an offer or withdraws their offer.
By Oklahoma state law earnest money is held in escrow by the listing broker or title company until closing. This way your money is protected and returned to you in case the seller is unable or unwilling to fulfill their end of the agreement. If on the other hand you are unable or unwilling to fulfill your end of the agreement, then your earnest money is normally forfeited to the seller. The good news is there are a lot of protections for buyers when purchasing real estate. For example, the home must pass inspection and appraise for the proper amount or you can walk away and receive your earnest money back.
A contingency is a term or condition that must be met for an offer to become a binding contract. Contingencies always weaken an offer. Yet some are considered normal. Some common purchase offer contingencies include:
- Approval of agreed-upon third party inspections within a stipulated period of time after the seller’s acceptance of the offer. This allows you to “walk away” from the contract if you find the inspection unsatisfactory.
- Obtaining specific financing terms, such as interest rate and the duration of the mortgage. If you can’t find the mortgage terms you’re looking for, as specified in your offer, you cannot be bound by a contract based on your offer.
- Selling your current home. Sellers may view an offer contingent upon the sale of your current home unfavorably. Buyers are in a better negotiation position without contingencies. An accepted offer on the home you’re selling will improve your negotiating position on the one you want to make the offer on.
After your offer is drawn up, I present it to the listing agent, who presents it to the seller.