We are finishing up our series for first time homebuyers. So far, we talked about what you should do before you start looking for a Dana Point home
and what you should do while youâ€™re looking
. In this last article Iâ€™m going to give you some pointers for when you find that perfect house and youâ€™re ready to make an offer. If you have questions about any part of the home buying process, or if you need an agent to represent you, please call me, Andrea Ballesteros, at 949-690-5159. If you have your own tips to share, please write them in the comments section below
- Be prepared to make multiple offers. Right now in Dana Point, and all of Orange County, inventory is low and demand is high. This means that you will probably have to negotiate with the seller and make several offers before one is accepted. It may also mean that you have to make offers on a few different houses before youâ€™re able to seal the deal. Preparing yourself for this will help prevent a situation in which you fall in love with one house, engage in an outrageous bidding war and end up paying too much money.
- To make your initial offer too low. If youâ€™re offer is too low, chances are the seller will simply walk away and not even participate in negotiations. An experienced real estate agent will help you make a competitive offer, one that is high enough to get the sellers attention but low enough to leave you some negotiating room and get you a good deal.
- Include earnest money with your offer. Earnest money is part of your deposit and you include it with your offer to show you are serious about buying the house. The amount of earnest money varies, usually between 1-3% of the houses listing price. Often the earnest money is given with the offer, but sometimes a note is given saying that x amount of earnest money will be delivered within x amount of days of offer being accepted. Talk with your real estate agent about the best way to handle earnest money.
- Write contingencies into your contract. Contingencies allow you to back out of the deal and get your earnest money back if certain things go wrong. Before you sign, make sure it is clearly written that you can back out if your financing falls through, you loose your job, you find something majorly wrong with the house or the appraisal shows that the house is worth less than the agreed upon price. These are all very common contingencies. You may include some others, such as the sale is dependent on the sellers fixing the leak in the bathroom, but be careful about putting in too many contingencies as this may frustrate the seller and cause him to deny your offer. Again, talk with your real estate agent about the best contingencies.
- Get pre-approved. Pre-approval means you have talked with a specific lender who has looked at your financial history and has pre-approved you for a loan of a certain amount. Getting pre-approved shows the seller you are serious about buying the house and shows them that you are capable of getting the funding. Many sellers donâ€™t want to risk entering a deal with buyers who arenâ€™t pre-approved because its more likely the deal will fall through due to lack of financing.
- Connect with the sellers. For some people, selling a house is strictly business and the communicate solely through their real estate agent. You may never meet them. Yet for most people, selling their home is an emotional time and they will want to meet potential buyers at least once. They want to make sure their home is going to someone who will appreciate it and take pride in it the same way they did. Connecting with the sellers on a personal level will make them comfortable doing business with you and give you an edge over other offers. This doesnâ€™t mean you need to become their best friends and go out to dinner with them, just take time to get to know them a bit. Ask them what their favorite part of the house is, where they are moving to, any upgrades theyâ€™ve made to the house, etc.