Whether you are looking to secure your dream house or part ways with the family home, understanding the importance of a home offer is key to any real estate transaction. If price was the only option, the real estate process might be a bit easier for everyone. However, there are many factors you need to take into account when buying or selling a home.
Also, in the event of multiple offers being made or received, there is a strategy that goes into taking in all of the information and making the best decision possible for you. After all, don’t we all just want to find the perfect home?
The Amount of the Offer
Really the most obvious and the most considered aspect of this list, the pricing amount is important and should not be overlooked. The first thing to determine for a buyer is whether or not the price is fair. Comparing similar homes in similar areas can give the buyer a better idea of what financial bracket the property should lie in.
From a seller’s perspective, it is important to be aware of your buyer’s financial details. Knowing who your buyer is using for a lender and requiring a pre-qualification letter can sometimes be an important step towards a safe purchase. Understanding your buyer is key to any real estate transaction.
From both perspectives, it is important to keep in mind the current state of the market. Prices on properties will obviously differ in a buyer or seller’s market, so it is important to recognize this before making or receiving an offer.
The Source of the Finances
While finances will be different for every buyer or seller, it is important to find the right financing plan that works for you. While it has been said that “cash is king” and that debt can burrow you into a hole, sometimes financing a home through a mortgage can provide tax breaks or other monetary incentives.
While cash eliminates interest rates and most closing costs, draining your cash assets can sometimes make you vulnerable and unsteady in your financial future as well if not appropriately accounted for. However, sellers may be more tempted to accept a cash offer if they are looking to quickly sell their property as there is less processing time for a loan to account for.
Currently, since interest rates are so low, it might be wise for even buyers with a surplus of cash to consider financing as well. While no one knows for sure how long this will last, it might be advantageous to take this into consideration when making a financing decision.
Overall, it is best to consult with your bank or financial advisor to see which avenue makes the most sense for you. Every buyer or seller is different, so what works for one might not necessarily work for another.
The Conditions of the Offer
As a general rule, the fewer conditions that are associated with an offer, the stronger the offer. Sometimes, a buyer may have to wait to sell his or her house before committing to the offer. This can be difficult as the seller has no way of controlling when or if the buyer’s home will sell.
A few other common contingencies include the home inspection, property appraisal, and buyer financing – which all protect the buyer in the event that there are major defects with the home or if the house doesn’t appraise during closing. If you make or receive an offer that has too many conditions, sometimes it may be best to look the other way.
The Broker of the Offer
While it may often be said, it is still important: not all agents are the same. If the buyer is trying to represent himself? This could potentially mean more responsibility and also more liability for the listing agent.
The agent the buyer or seller is working with could also not know what he or she is doing or be difficult to work with. While sometimes thought of as minor details, these can sometimes be the difference between an offer falling through and closing. However, here at Jensen and Company, we have been representing Park City home buyers and sellers for over the past 30 years and continue to provide our incredible clients with the knowledge and understanding of every step of the process. Whether you are buying or selling in Park City, we have you taken care of.
