How to make an Offer and Negotiate a Price on a Home

O.K. you have found a dream home or you have a short list of properties to draw from. Now you are ready to start wheeling and dealing by making an offer on the property.

Things you will need:

A Real Estate Agent
A Real Estate Lawyer
A calculator
A Mortgage pre-qualification document.
Access to Inspectors
Writing Paper.

Step 1

Tell your agent that you like the property and would like to make an offer on it. Be sure to compare your property to comparable homes in the area. Is it over or under priced? This will influence the amount you offer, however; the offer will always be dependent on a favorable report from the Inspectors.

Step 2

You have done your financial home work haven’t you? You have been pre-qualified for a mortgage, haven’t you? If not, now is the time to go to a lender or get in touch with a broker and get the matter settled.

Step 3

Make a tentative verbal offer and see what response you get. Your Real Estate Agent will be able to do this for you. The seller will either accept the offer, reject it or make it known he is prepared to negotiate.

Step 4

If the offer is accepted, this is the time to go to your Real Estate Lawyer who will draw up the sales contract. There will be a certain amount of toing and froing on this one, but it will be between the lawyers, so you don’t really have to do very much. It is a good idea to be quite lenient in the contract. Be flexible over the escrow period. If they want 60 days for the escrow time and not the usual 30, give it to them and be flexible on closing dates. This will build up a better relationship with the seller that might always come in useful. However, be sure to have an escape clause if the Professional Property inspection is unsatisfactory and make clear who is responsible for paying for remedying the defects post the Inspection

Step 5

If your offer is rejected out of hand. Walk away! You can always come back later if the property has not sold and make another offer.

Step 6

If the agent indicates the seller is prepared to negotiate, you will need to make a higher bid. Be sure you can afford to do this before proceeding. Write the seller a personal letter and get the Real Estate Agent to deliver it. Tell the seller how much you like the property and why. Sometimes the personal touch has an edge over the impersonal legal angle. It really all depends on the people involved!

Step 7

The Contract has been drawn up and signed: It looks as if you are on your way to buying a home. Congratulations!

Tips

Much of this information will depend on whether we are in a buyer or sellers’ market. It looks as if we have entered a buyers market so life is tougher for the seller and easier for the buyer. There is likely to be less competition and offers will be accepted more easily. However, this can change with the times!