Tucson Real Estate News

In HBP-101 Part 1, Part 2 and Part 3 we talked about the role of your Realtor, Internet searching options and what to look for when viewing home. Now you’re ready to make an offer.

Making an offer is more than just offering a dollar amount. There are other things to consider, date of closing, concessions, warranty, choice of Title Company, amenities included with the home, fees payment and much more. This is where your Realtor should be researching and making recommendations. By this time you should have a good relationship with your Realtor. He or she should know what your needs area and how to apply them to the contract. Things to consider when making an offer:

1. What are the comparative sales? Your lender is going to have the home appraised. Knowing what the appraiser may be looking at will help in determining a fair value to offer. Your Realtor should be providing you with this information to help determine the right price to offer. Most contracts have an appraisal clause requiring that the home appraise at or above the selling price. Smart and honest sellers will have already completed this task.

2. What is an acceptable offer? Anything shy of the asking price the Seller is going to consider they are putting into your pocket as a buyer. If they are asking $150,000 and you offer $145,000 the sellers interpretation is they are already giving you $5,000. Add to it a home warranty for $450, and Seller concessions of 3% of the selling price for buyer closing costs and another $4,350 is deducted from the price. The offer in reality is now $140,200. The seller will see that they have given up $9,800 to you as the buyer. Ask yourself, why would you give a stranger $9,800? Everybody wants a deal, but there are limits. Being reasonable gets results.

3. What are the best conditions for you? Each buyer has different needs. Maybe you can afford the payments and FHA 3.5% down payment, but not the closing costs. Maybe you can afford all the costs and want a lower price. Having a refrigerator added may be important. There are differences in appliances so being specific about value or type helps here. Maybe postponing closing until your lease is close to expiring is important.

After an offer is accepted you have a contract. While negotiating with the Seller it is still just an offer. If another buyer comes into the picture, you could lose your negotiating power. The longer it takes the higher the risk of losing. If you like the home, chances are somebody else likes it. A win-win scenario that can be negotiated quickly is best for both sides. In Arizona, once buyer and seller have an agreement and a contract is established there is a pre-defined inspection period which can be negotiated as well. That is the first obstacle. The next is the appraisal. Within the Arizona contract is a safeguard called the Appraisal Contingency. The last obstacle is underwriting. Underwriting is a lender requirement. As a Buyer the hardest obstacle can be underwriting. So, good communication with your lender will be important to your sanity.

Now you’re ready. Now you have a good foundation for staring your search and buying the home of your dreams or your starter home. Working with a Realtor of your choice will help you tremendously. Happy house hunting.