How to Make an Offer on your Dream House
By Caitlin in Mortgage
Making the decision to buy your first house or your dream home is major life moment, one that you’ll probably not take lightly. Making sure everything goes both smoothly and in your favour will take some planning and a bit of work, but it will definitely be worth it in the end. Once you’ve found the house you’ll need to make an offer, which can be an intimidating process, here are our top tips for making an offer on your dream home.
- Do Your Research
By the time you’re ready to make an offer you’ve probably completed all the “fun” research: checking out the local neighbourhood, looking at the schools, places to shop and eat. Now that you want to make an offer you need to do the “important” research. This includes the local real estate market, how much other houses in the same area were sold for. The condition of the house itself, this means hiring a home inspector to take a look at the structure and make sure there aren’t any issues. Finally concerns like resale value, this might be the house you want to retire in but you never know what will happen.
The more research you do the more information you’ll have and the better your deal will be. Taking into consideration all the above factors is your best bet for making sure the home of your dreams is actually a dream and not a nightmare.
- Hire a Home Inspector
While you’re conducting your own research it’s important that you hire a home inspector to look at the house before you make any offer on it. A home inspector is trained to look for underlying causes not just cosmetic issues, this is why it’s so important that you hire one. They will look for unsafe construction and repair jobs, the condition of the roof and the plumbing and any electrical issues. If there are any serious or minor problems with any part of the house your inspector will find them. You and your real estate agent should be present to supervise and ask questions when needed. Once the inspection is complete your inspector will provide you with a report that details all the issues and concerns. You will then be able to use this report to negotiate a lower price or decide not to buy the house if there are serious problems that you don’t want to deal with.
- Draft the First Offer
After you’ve decided to make an offer on a house your real estate agent will draft a formal letter stating the terms of your offer. The letter will contain all the pertinent information like price, financing terms, address and any other promises. Your real estate agent will probably take of this step but it’s important that you understand the process and are a part of it as much as possible.
- Negotiate
This is probably the hardest part of the whole process as there will be a lot of waiting around. Once you and your real estate agent have submitted your first offer you will have to wait for the seller to look it over, discuss it with their agent, and then submit their counter-offer. The counter-offer will include any issues they have with the price and terms or conditions. You should prepare yourself for the negotiating to last at least a couple more rounds.
Negotiating can be tough and you might feel pressured into making a decision you aren’t comfortable with, just remember that this is potentially going to be your home so you need to make the choices that are best for you. Once you’ve both settled on a price and set the terms the next step will be to finalize the deal and close the sale.
- Finalize Financing
Once your offer has been accepted by the seller you’ll need to meet with your bank or lender to finalize your mortgage. This can also be a long process, but if you were preapproved for a mortgage and disclosed all financial issues and assets and were completely honest then you shouldn’t have too much to worry about. As soon as your mortgage is finalized you can then close the deal on the house and make the purchase of your dream home official.
Purchasing a home is a big step in your life and a big deal financially, but it doesn’t have to be a stressful and difficult situation. Being as informed as possible and doing your research can help ensure what the whole deal goes smoothly and in your favour.