What makes a great offer?
So you’re ready to make an offer on a new home and you want to make sure that you put in the best offer to the seller. That’s great! But let’s talk a little bit about what makes a strong offer so we make sure you get your dream home. When I talk to my clients, whether they’re buyers or sellers, the most common thought is that a cash offer will always be the strongest offer. This is not always the case. You have to make sure you consider the context of the sellers situation. For example, maybe you’re working with a seller that has no time restraints with their sale. They’ll most likely be wiling to wait a few extra weeks for a loan to fund if it means they’ll make more money on the sale. In this case, a cash offer means nothing if the price isn’t good enough for the seller.
The next things you need to consider, are the contingencies. What do I mean by contingencies? Well, the easiest way for me to define a contingency is to give you an example. Let’s say you happen to come across a home for sale, and it’s the perfect home for you. You had no real plans to move, but this home is just too good to be true so you put in an offer to buy before you even begin to sell your current home. Now, obviously you don’t want to pay two mortgages, so you make the purchase of your new home contingent upon the sale of your current home. In this case, this would be a very large contingency and could potentially deter a seller from accepting your offer, regardless of how high your offered price is.
Now, just because you have some contingencies, it doesn’t necessarily mean you have a weak offer. Some contingencies are so common and boiler plate that they’re built right into the transaction and sales agreements of both Oregon and Washington. Examples of the most common types of contingencies are for financing, inspection, disclosures and other things of that nature. So when you’re ready to make an offer, keep in mind what type of contingencies (if any) will be on your offer.
If you have to put a contingency on your offer, there are some ways to sweeten the deal, so to speak, and make your offer more appealing to a seller. One great way of doing this is increasing the amount if earnest money that you’re willing to put down. Typically, most buyers put down one percent of the sales price as earnest money, but in some cases I’ve seen buyers put down the entire sales price in earnest. I typically caution my buyers that if they put too much down in earnest, then it may cause problems if for some reason the transaction is taken to small claims court. What do I mean by this? Well, if for some reason there is an argument over the sales agreement, that argument is typically taken to small claims court. If you’re arguing about any amount of money above $10,000, you’ll need to bring in lawyers and argue the case in court as opposed to simply filing an arbitration and submitting to small claims.
I know that I’ve just given you a lot to think about and it may be a little overwhelming but, I promise that the team here at The Matin Real Estate Group can help you through the process. So if you’re looking into buying a home or you’re ready to make an offer but you’re feeling a little lost, please reach out to us today. We’ve got the skill and experience to help you with any Real Estate situation you may find yourself in.
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