While buying a home might seem as simple as paying the asking price, knowing the ins and outs of making offers is crucial to buyer success. Everything from the terms of your mortgage loan to eventual closing costs can affect the amount you spend on your home, and making the right offer can significantly affect your chances in a competitive market.
Here are some of the basics of making an offer on a house:
Find the right home for you
Start by searching online listings for properties to view, or book a tour with an agent. The more knowledgeable you can be about the property, its location and history, the more informed your offer will be. And don't forget, your real estate agent can use their expertise to guide you every step of the way.
Write your initial offer
When it's time to make your first offer, consult your real estate agent for help choosing a starting price. Consider your own budget as well as the local market, home condition and seller situation.
Decide your earnest money offer
An earnest money deposit is an upfront amount of money included with your initial offer on a house. It's used as a sign of good faith, and also a form of insurance for the seller in case you back out of the sale.
Typically, the expected amount for this deposit is between 1% and 3% of the home's purchase price. However, if you're in a highly competitive market, it can benefit you to offer up to 10%.
Consider your contingencies
A contingency is a provision in your offer which protects your interests in case the unexpected happens between your offer on a house and closing. This allows you to withdraw your deposit under agreed upon circumstances.
One standard contingency example is a home inspection contingency, which allows you to back out of the sale without loss if the inspection uncovers any major problems with the property.
Real estate agents can help you decide what contingencies could work best in your favor. Depending on whether you're in a seller's market or a buyer's market, some strategies might work better than others.
About the Author
Marsha Charles
Consistent top listing and selling agent receiving Chairman's Club award for superior sales achievement almost every year while associated with Preferred Properties, Inc. Consistently receive the International Presidents Premier award for sales volume since joining Coldwell Banker Realty and ranked in the top 1% of agents in Connecticut and Westchester County. In 2021 I received the International Society of Excellence award for sales volume in excess of $100,000,000. I have been named a Top Five Sales Agent for customer satisfaction since 2010 (longer than any other agent in Connecticut) and listed in Connecticut Magazine. Named one of the Top Agents in Connecticut by Real Trends since 2018.
I work with sellers and buyers and also have a strong understanding to needs of those who are relocating . Background and experience in advertising, public relations and photography offer creative and innovative marketing plans for sellers.
Realtor designations include: Graduate Real Estate Institute, Certified Residential Specialist, Certified Residential Marketing Specialist, and Pricing Strategy Advisor. Served as President of New Canaan Board of Realtors (two terms), Director (three terms) and currently serve on Professional Standards Committee. Named Realtor of the year by the New Canaan Board of Realtors in 1994and again in 2022.
Married and mother of other of four children who attended and graduated from the New Canaan School System, Member of New Canaan, Darien, Greenwich and Statewide MLS systems. Areas covered include New Canaan, Darien, Greenwich, Rowayton, Norwalk, Wilton and all of lower Fairfield County.
