Making an offer: six tips for getting a great deal

You have looked at literally hundreds of homes over several weeks and finally think you have found your dream home. Now, at last it's time to make an offer.

Putting in an offer on a property is similar to opening a case on "Deal or No Deal." On the game show, you have no idea how much money is in the "closed case" before calling out the case number, nor do you generally have any idea what the seller's desired sales price is before you start negotiations.

The seller's case is only revealed when they accept your offer, or propose a counter offer. The challenge is to know how to structure your offer going in so you have the best opportunity to make the deal you want.

As a buyer, the good news is inventories are way up in most areas of the country. Mortgage rates continue at historic lows and are very favorable to buyers. This summer may just be the perfect time to purchase a home with the best terms possible.

Here are six tips to getting a great deal:
  • Find out what the interest level is – Have your agent contact the listing agent and find out what the recent activity level on the listing has been, including how many showings have there been recently. Also ask if there have been offers already presented on the property and, if so, how many, and why is the seller selling?

    Finding out this information before you write the offer can help you assess the motivation of the seller so you and your agent can determine how to best structure your offer price.
  • Do your homework on the current market – Familiarize yourself with the competition in the area by looking at other homes for sale in the neighborhood, even if they don't entirely meet your criteria. That will provide you with much needed information to help establish your offer price, as well as the price you will eventually agree to pay for the property.
  • Be realistic about your ideal price – Determine in advance what you will pay for a particular piece of property. Base what you can afford to pay for a home on your available down payment and monthly mortgage costs you are willing and able to carry, plus other hidden housing expenses such as maintenance and minor improvements. Just because you fell in love with your "dream house" it is not a wise idea to overpay for a property. You may be better off walking away so you don't regret overpaying later on.
  • Expect several offer rounds – Negotiations require both parties to give and take some, hopefully resulting in an enforceable contract in the end. Home sellers are usually very attached to the home they may have lived in for years and perhaps raised a family. It can be difficult for sellers to detach themselves and see the real worth of the property.
  • Split the difference – Once your agent has presented your initial offer, negotiations and counter offering begin. One commonly accepted approach for coming to an agreement on price is to split the difference between how much the seller wants to sell for and how much you, the buyer, want to pay. Doing so often can make for a win–win situation which allows both parties to be satisfied with the contract terms and eventual sale.
  • Hire an experienced, professional real estate agent – Look for an agent who works full–time, has several years of real estate experience, and has successfully sold homes in the area you wish to buy.

    Ideally a buyer's agent specializes in the local area, is a strong negotiator and a good communicator. Interview several agents before choosing one. Be sure to select someone you think you can work well with and suits your business style. For a list of interview questions, visit http://www.homegain.com/tool_center.
Maybe you can win the case with the home of your dreams – all for the best possible deal!