Tips for Making an Offer on a Home

A home will be the biggest purchase you ever make in your lifetime, which is why you do not want to pay more than you have to. When it comes time to make an offer on a home, you'll know the list price, but you do not have to offer what is being asked. As a buyer, you can go under or over the amount depending on the situation. Here are some tips for making an offer on a home for sale that you need to be aware of.

Decide if You're Willing to Go Above Your Budget

You must consider how much the home is worth to you, and if it is worth going above your budget to secure it. For instance, if you have a lease that is expiring soon, it may be worth it to make an offer above list price in order to secure the sale in time. If not, you could end up paying more to move to a temporary home and then move again to your new home.

Look at the Home's Time on the Market

The amount of days that the home has been on the market can make a big difference in how much you pay. If the home has been listed for months and has not had much interest in it, you can make an offer below the list price. However, a home that was recently listed for sale may be getting multiple offers at once. An offer a list price could be below what others buyers are offering, causing you to lose the home.

Consider Your Contingencies

There should be several points where you are allowed to walk away from a home purchase, but those must be identified in the offer with contingencies. For example, you may want to walk away if the home inspection finds major problems with the property, or if the home is appraised way below what you offered on it. Contingencies give you an opportunity to back out or renegotiate with the seller, and potentially get a better deal as a result.

List Reasonable Closing Dates

Most homes close between 1-2 months from when the offer is accepted, which gives you plenty of time to get your mortgage approved and navigate the paperwork. However, offing a closing date well into the future may not work for the seller, even if it is convenient for you. Realize that sellers are going to like closing dates as soon as possible, because they are paying for the home during a time that they are not using it.