Home Buyer's Guide - Buy a Home

Making the Offer
You've chosen a home - now it's time to get the best deal you can.

The offer is the first step in negotiating the purchase of your new home. Try to consider all of the relevant facts when determining your offering price. Homes often sell for negotiated figures that are below the asking price - sometimes considerably below, so give serious consideration to your initial offer.

Consider Market Conditions
Home pricing and sales activity is strongly affected by the strength of the underlying market. In a weak market purchasers may be able to negotiate substantial reductions from asking prices. Conversely, it is risky to make a low offer in a strong market - another buyer may appear suddenly and pay full price.

Review the Specifics of the Property
Does the home suffer from a lack of curb appeal or other problems? If so, you may want to be more aggressive in your negotiations - chances are there will be less competition, even in a strong market. If the house needs renovations or repairs make sure you know exactly what to expect so you don't have any unanticipated expenses after closing.

How Badly Do You Want the House?
Will you (or your family) be extremely disappointed if you lose the house? If so, consider being less aggressive in your negotiations - especially in a strong market. Conversely, if you are willing to take a chance you may be able to get a better deal.

Evaluate the Seller's Motivation
A homeowner who is under pressure to make a sale is more likely to accept a low offer. Recognizing a motivated seller is a major step toward making an advantageous purchase. Common causes of pressure on a seller include financial difficulties, divorce, or the need to move by a certain date.

Consult with Your Agent
Your realtor is an experienced professional with deep knowledge of the local market, so make the most of this resource. Your agent can tell you how long a home has been on the market and can provide comparable sales for review. It's even possible that your agent may know of a motivated seller.

Are You Buying a New Home?
Many builders have a general policy of not negotiating prices (particularly in major developments), so if you are buying a new house you may have to pay full price. Nevertheless, you may be able to get a deal occasionally - particularly if the market is weak or sales in the project are slow. You have little to lose by trying.

Writing the Offer
An offer can be in the form of either a letter or an actual purchase contract (the preferred format when working with an agent). Whichever format you choose, make sure that you clearly specify all of the required information and terms in the offer. If you are pre-qualified for a mortgage, offer to provide a copy of your approval letter to strengthen your hand.

Counter-Offer and Negotiation
Instead of accepting your initial offer the seller will probably respond with a counter-offer. After reviewing the counter-offer you are essentially back to the beginning of the offer process - but with a better idea of the seller's negotiability. Consider all of the information and decide if you are willing to increase your price. This offer and counter-offer phase of the negotiation is often done verbally - through the agents or even at a meeting of buyer and seller - with revised contracts signed after price and terms are accepted by both parties.


3 Ways to Get Your Offer Accepted
1. Get prequalified for your mortgage before you begin the search. Advise the seller that you are pre-qualified and do not require a financing contingency in the contract.

2. Be prepared to close title quickly. Have all of your preparations in order so you can move swiftly. It is important, however, that you do not neglect inspections or other activities that are essential to protecting yourself in the transaction..

3. Be willing to overlook minor repairs and problems that would be a hassle for the owner to correct. Be careful, however - never extend this to cover major problems without a complete understanding of what is involved. Make sure that you have considered the cost of correcting these items yourself.

Choosing a HomeThe Contract


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