Buyer Beware: 5 Common Mistakes to Avoid When Writing an Offer

Writing an offer on your dream home is a delicate dance between paying fair market value for the home and meeting your budget. Working with a skilled realtor is essential in crafting the perfect offer to increase your chances of securing the home. Don’t make these 5 common mistakes when writing an offer:

Not getting pre-approved for a mortgage (if not paying all cash):

Getting pre-approved for a mortgage tells the seller you are able to afford the house and shows that your offer is a serious one. In order to get pre-approved, you will need to send financial information to your chosen lender, and you will receive a pre-approval letter that you can send to the seller. This step increases the likelihood of your offer being accepted and improves the strength of your offer. Note that a pre-qualification letter is not the same as a pre-approval letter.

Not being informed on current market conditions:

It’s crucial to be well-educated about the market you are purchasing a home in. You’ll want to know if it is a seller’s or buyer’s market (or balanced), how long homes have been on the market, and what comparable homes recently sold for. Working with a knowledgeable realtor is essential in keeping you informed. Making a lowball offer, while it may seem like a great way to save money, can offend the seller or make it appear that you are not serious about the home. A lowball offer may be rejected outright, preventing negotiations from taking place.  

Choosing not to work with a real estate agent:

Real estate agents are crucial in ensuring you are educated on current market conditions, assist you through the complex offer process, and negotiate as needed. Although you may want to save money in the fees it costs to pay an agent, those who use an agent actually end up saving money on average by receiving a better deal. Experienced agents provide invaluable assistance to home buyers to navigate the offer process and ultimately secure your desired home.

Getting emotionally attached:

Falling in love with a home and feeling like you need that exact home can lead to overbidding and spending out of your budget. Although it's easier said than done, try and look at the home objectively. Check market comparisons, potential flaws, and budgets when deciding on a home. Make your offer based on these facts, and try your best to keep the excitement and emotions out of the picture until the home is yours. 

Not reviewing the contract thoroughly:

There are many different parts of a real estate purchase agreement. Pay close attention to the purchase price, included or excluded items, closing date and costs, contingencies, and earnest money deposit when reviewing your contract. It is extremely useful to have a real estate agent for reading contracts, as they are able to decode complex legal wording and help you understand what you are signing.