How to Make an Offer as a First-Time Homebuyer
You have been searching for that perfect home for months or even years and the time has finally come: you are ready to make an offer. This can be a very stressful time especially if you are a first-time homebuyer. To help you in the process, consider these four first-time homebuyer steps when making your offer.
Learn All You can About the Home
Before you make an offer, make sure you know all you can about the home. Find out how long the home has been on the market. Ask if there are currently any other offers on the table and when they will look at the offers. Also, try and find out why they are selling the home to determine how motivated they are. Knowing this information will allow you to gage the price of your offer.
Look at the Comps
Once you find out information about the home and the seller, you will want to start looking at the comps in the area. Your local agent can provide this information for you. Work with your agent to review the sales in the past six months. If there is a sale pending, this is the most up-to-date statistic and you should use this information if possible. Ask your agent to find out information about the home and why this was the agreed upon price. Using comps in the area is very helpful when deciding how much to make an offer for.
Talk with your Lender
At this point you want to make sure that you speak to your lender about the offer you are going to make. First you need to make sure that you have a pre-approval letter to go along with your offer – this will makes it a solid offer. You will also want to check on mortgage rates and products that are available at this time. Depending on how long you have been looking for a home, all of these things could have changed drastically since you first began. You might even have more money for a down payment which will allow you to qualify for something better.
Contingencies Matter
The last thing you will want to think about are the contingencies that you include in your offer. Make sure you consider including contingencies like the inspection and appraisal because they protect you in the case there is something wrong. But avoid including contingencies that don’t make sense or turnoff the seller because the seller can reject your offer due to the contingencies no matter how good the offer is.
As a first-time buyer you want to make sure that you do all of the homework that allows you to put forward your best effort. Following these first-time homebuyer steps can help ensure that you make the right decisions from the start, preparing you for anything that comes in the process.