When you finally find a home that checks all the boxes, the next step is to make the seller an offer he can’t refuse. But don’t take a page from Don Corleone’s book — there’s an art to making a home offer that will ensure the home buying process is smooth and painless, and ideally gets you the house you really want for a price that works for you.
From calculating your starting price to negotiation tips and counter offers, we’ve got tips for making an offer on a house that will help get you the best deal on your dream home.
Making a home offer: The basics
Negotiating not your strong suit? Don’t worry. This is where your professional real estate agent truly shines. When you’re ready to make an offer, it’s your Realtor® who submits the offer on your behalf to the seller’s agent.
Once the offer has been received, there’s really only three possible outcomes. The seller could: accept the offer; decline the offer (this is unlikely, but could happen if the seller feels your offer is out of line and not worth negotiating); or give a counter offer.
If your offer is accepted, you will sign an agreement. The contract will outline any terms or conditions on the sale, which may include things like an inspection or financing.
What is included in a home offer agreement?
- The price that you agree to pay for the property and the amount of your deposit
- A closing date — usually 30-60 days from the offer date
- Any conditions such as an inspection or getting approved for a mortgage
- Any items you would like included in the sale of the property, such as appliances, window coverings, light fixtures, shelving, etc.
- An expiration date for the offer; for example, 24-48 hours
- A request for a current land survey
How to pick a starting price
This is another area where it will be really important to have a reliable, experienced Realtor® on your side. Your starting price for a house will factor in a few different criteria such as: your budget, the current market, comparable prices in the neighbourhood, the seller’s situation, and the selling condition of the home.
A good agent will be able to guide you towards a number that will set the tone for the rest of the transaction. The starting price shouldn’t be too low that the seller doesn’t take you seriously, but should leave some wiggle room for negotiation. Having said that, it is a buyer’s market right now, so the right offer might stand a good chance at being accepted right off the bat.
Negotiating the price of a house
For a lot of people, the idea of haggling over the price of anything makes them uneasy, let alone the stressful, emotionally-charged process of negotiating a home purchase.
We’ve already pointed out that an experienced Realtor® will be a huge help with negotiations, but there are a couple things you can do, as a home buyer, to make the process a little easier.
1. Be realistic about the market. Buying a house in a buyer’s market is great because, by definition, there are more homes for sale than there are buyers to purchase them. This means you might be able to negotiate a much better price or ask the seller to pay for closing costs.
On the flip side, negotiating in a seller’s market where there are more buyers to sell to isn’t as easy. You’ll need to act quickly and seriously consider how many conditions you want to include on your offer.
In a balanced market, you can anticipate some back and forth until a deal is reached between you and the seller.
2. Keep emotions in check. For a lot of people, there’s a strong emotional attachment to a home. For sellers, a sentimental attachment to a home can make it hard to say goodbye (and, as a result, can negatively impact negotiations). And for buyers, falling in love with a home usually means you're visualizing beyond floor plans and cabinetry, and are imagining the life you'll live there and the memories that will be created.
When emotions take over, it can be hard to stick to the plan and even harder to walk away if negotiations fall out of your favour. Be really honest with yourself about how much you’re willing to compromise if you find yourself falling in love with a house for sale.
Ask yourself what will have the most negative impact over the long term: Losing out on a home you really like? Or agreeing to purchase terms that don’t really work for you? Emotions can make us impulsive, but don’t let them guide the biggest purchase of your life!
Navigating the process of buying a home is challenging and when you finally find yourself ready to make an offer, an experienced Realtor® can take the pain out of negotiations and get you the best deal on your dream home.
Ready to make an offer on a home for sale in Edmonton? Wally has been negotiating deals that sellers can’t refuse for over 15 years. Request a consultation or send your questions online.