From open houses and interest rates and escrow, buying your first home can be complicated and confusing. For many first-time homebuyers, knowing when and how to make an offer on their dream home can be the most difficult part of the process. Knowing what not to do is a great way to ensure your offer is seriously considered and even accepted by the homeowner.
Here are a few common mistakes first time home buyers make when making an offer on their first single family home.
Foregoing the Mortgage Preapproval Process
You have only just begun house shopping, but you have already found the home of your dreams. The house is amazing, and you know there will be multiple offers, so you decide to submit a formal offer. Unfortunately, in your haste to nab the house you forego a crucial step that can cost you a lot of time and money: getting a mortgage preapproval.
A mortgage preapproval can not only allow you to know your budget, but it can also let potential sellers know you are serious. If you make an offer on a house and do not get approved for that amount by your lender, you can risk wasting money on a non-refundable deposit or home inspection.
Submitting an Offer That Is Too Low
The listed price of a home is based upon several factors, including its location, the number of bedrooms, the number of bathrooms, and the comparable sales in the neighborhood. Submitting an offer that is fair and will not offend the seller is a delicate process that can end badly if you give an offer that is far below the market value and asking price.
Instead of coming up with a number on your own, work with your real estate agent to submit an offer that is low enough to allow for some negotiations, but not so low that the offer takes you out of the running.
Foregoing an Inspection Contingency
Your real estate agent will work with you to create a fair offer that benefits both the seller and you. This includes contingencies, which are designed to protect the buyer and ensure that certain issues with the property are resolved before the house is sold. If the house has many offers, you might consider foregoing an inspection contingency, which is a mistake because you may wind up with a property that has several hidden issues that only a qualified inspector would uncover.
From submitting an offer that is insultingly low to putting in an offer before you receive a mortgage preapproval, there are several mistakes first time homebuyers make when submitting an offer for a house.
This website can serve as your home for information about real estate. Here, you will find articles about the buying process and others on the selling process. We've also included content related to getting a mortgage, finding a real estate agent, and scheduling an inspection. We hope that by addressing all aspects of the real estate world, we will make you better prepared to handle any real estate transactions that might be in your future. After all, real estate can be a really smart investment, but only if you buy the right home and know how much to offer. Start reading, and enjoy what you find.