Owning that home was once just a dream. But now you’ve found the one for you within your price range. The next step is making an offer – but it has to be a winning offer so that you can beat out all those other buyers interested in your dream home. Your offer will be in the form of a purchase agreement or letter of intent to purchase. This is a legal document that details the price you will pay, how you intend to come up with the money, and other important aspects of the transaction. But first you have to have the winning bid, so here are a few tips for making a winning offer when buying a Los Angeles house.
1. Show Your Commitment
Maybe the most important aspect of making a winning offer is showing your commitment, that you are indeed a serious buyer. And one of the best ways to do this is by tendering a written offer rather than a verbal one. Written offers are taken more seriously, and they also allow you to highlight the points that make you a strong buyer.
Another way to show your commitment as a buyer is to get pre-approved for a mortgage. When you make an offer with your pre-approval letter in hand, you are far more likely to succeed in making a winning offer when buying aLos Angeles house. Having a pre-approval letter will put you ahead of all the other bidders who don’t have one, who still have to go through the approval process.
2. Make Sure the Offer is Competitive
Of course, the first thing a seller will want to know is how much you’re willing to pay – and you want to pay, understandably, as little as possible. The trick is to strike a balance with a competitive offer that is still within your range. If your first offer is too low, it may be immediately rejected, and you may not have the opportunity to make a counteroffer.
Formulating a competitive bid involves several variables: comparative market analysis, how long the house has been on the market, other offers, number and extent of needed repairs, and more. A competitive offer doesn’t necessarily need to match the asking price – it just needs to be, well, competitive. This is one area where you really should lean on the knowledge of your real estate agent. Call (866) 593 7012 to find out more.)
3. Offer More Down
One sure-fire way to bolster your chances of making a winning offer when buying a Los Angeles house is as simple as offering a higher down payment. If you can afford it, this will put you well ahead of the other buyers because sellers always prefer more cash in hand. Typically, down payments fall in the range of 3% to 20%. But when the market is competitive, a higher down payment will put you in the position of a serious buyer, and the deal will be seen as less risky.
4. Limit Contingencies
Another possibility for making a winning offer when buying a Los Angeles house is to provide the seller more incentive to accept your offer. And you can often do that by limiting contingencies to sweeten the deal. You could, for example, do away with the financing contingency to set your offer above the others. Be aware, though, that this is more risky for you as the buyer because if the financing falls through, you will lose your deposit. Just carefully analyze your financial situation to know what you can afford and how much risk you can assume. Here’show the real estate professionals at HouseLogic put it: “Just remember to keep your eye on the big picture. If you and the seller are bickering over a $500 repair . . . keep in mind that’s a drop in the bucket in relation to the size of the bid.”
5. Read the Fine Print
Making a winning offer also means reading the fine print in the sales contract. That contract contains key information about the property, such as address, tax ID, types of utilities, and so on. But it also specifies which fixtures and personal property the seller will leave behind with the house, things like appliances. Typically, the seller will provide the buyer with a list of these items before an offer is made. You can use this, then, in your negotiations, but you also need to ensure the contract matches up with the pre-submitted list.
6. Work with a Good Agent
When you make a formal purchase offer, it typically becomes legally binding when the seller accepts your terms. Even so, it’s common for terms to be altered or amended before closing, often with everything hanging on favorable inspection outcomes. So, making a winning offer and successfully navigating everything that comes after usually requires the services of a good agent. The trick lies in finding the best tactics for the particular bidding situation.