If you’re a First Time Home Buyer, or just a typical home buyer in general, you really need to know that not every offer you make on a home will be accepted by the sellers.  There are many factors that go into writing an offer to purchase Real Estate, and we’ll discuss them in this blog.

First and foremost, PRICE MATTERS!  Just because you think a property might not be worth what a seller is asking, doesn’t mean that it isn’t.  Your Realtor and the seller’s Realtor will be able to pin-point what the “fair market value” is for the home, and whether or not you choose to accept that number is completely up to you.  But if a seller is asking $150,000, and the fair market value shows $145,000, I really don’t recommend putting an offer in at $125,000, just because you feel more comfortable in that range.  If this is your plan, be prepared for the seller to reject your offer.

Another scenario that I see buyers getting burned on is what we call the “terms” of the contract.  Let’s keep the above example of $150,000 asking price with FMV showing $145,000.  You decide to write the seller an offer of $148,000, slightly above FMV and just under their current asking price.  Sounds like it’s going to be accepted, right?  Not necessarily.  The terms of the contract are just as important as the price you are offering.  What are the terms?  Such things like closing date, financing type, inspection contingencies, and escrow money (AKA “good faith deposit”) are sometimes equally as important as how much you are willing to pay.  I’ve seen buyers get really excited about putting in a high offer, thinking it was a no-brainer that this was the house they’re going to end up in.  Only to be extremely disappointed when the sellers accepted another LOWER offer, because the “terms” were more attractive. 

If this situation ever happens to you during your search for a new home, don’t get frustrated or lose faith.  This is a normal occurance that I’m seeing at least half my buyers have to go through.  Keep in mind, that eventually, you will end up in the home that was meant to be.  You do however want to keep in mind that low balling an offer for a house that you REALLY love is certainly not a good idea.  Also remember that it’s not always about price, and the contract’s “terms” are equally (and sometimes more important) than the price that you write.

Hope this helped.  Call, email, or reply to this blog if you have any further questions!