Getting homeowners insurance is an essential aspect of protecting your home. After all, buying a house will probably be the most significant financial investment you will ever make. Even among wealthy individuals with considerable assets, the home is usually the highest value possession they have.
But before you get to that crucial step, you will first have to own a house. For most people, the objective is to make an offer on a dream home that ticks all the boxes.
Interestingly, despite the pandemic, more people own homes now than at any time since the 2016 recession. A report published by Statista Research Department shows an increase in the homeownership rate from 63.7% in 2016 to 65.8 percent in 2020. Furthermore, the growth is expected to continue well into the future.
Even so, owning a house isn’t always easy. When you find your dream home and make an offer, you might realize just how stiff the competition can be. But by following the steps outlined below, you can increase your chances of making a winning offer and getting that home you have always dreamed of.
6 practical strategies for making the best offer
Here’s how to make an offer on a piece of property that most sellers can’t resist:
- Get mortgage pre-approval. Sellers usually favor buyers whose mortgages are pre-approved. To them, this signifies that the prospective homeowner will have sufficient financial capability to uphold their end of the deal.
There are two crucial steps involved in getting pre-approved for a mortgage. First, validate your price range for the homes you can afford. Next, present proof of credibility to the seller.
Keep in mind that pre-approval usually takes longer to process than standard mortgages. On the plus side, once the seller accepts your offer, you will have a significant head start in your mortgage application.
Take note also that a pre-approval is different from a pre-qualification letter. Pre-approval confirms that you are eligible to borrow from the lender based on their evaluation of your income, credit scores, and properties. On the other hand, pre-qualification only indicates the estimated amount of money you can borrow from the lender, which is still subject to approval.
- Do not max out your pre-approval. Just because you managed to get pre-approved for your mortgage doesn’t mean that you should use it all up on your offer. Doing so could negatively affect your credibility and make sellers wary.
Keep in mind that interest rates can increase significantly between pre-approval and actual approval. So using up all your funds could put you in a tight spot when the time comes for serious negotiation.
- Find the seller’s pain points. Knowing more about the seller and their market can give you a significant advantage when making an offer and increase your chances of getting the property for a better price. For example, you could check for competitive offers, motives for selling, or other factors that could help you make a more informed proposal.
- Give your best price. Be prepared to make your best offer. Lowballing a seller will rarely work out in your favor, particularly in the real estate market. It would be a good idea to find out your competitors’ best offers or consult an expert such as a licensed real estate agent to come up with a reasonable figure.
- Consider your contingencies. If possible, waive contingencies for credits and non-essential repairs. Conversely, do not waive the home inspection contingency to preserve your deposit if you back out of the deal. On the other hand, if you intend to pay in cash, there is no need to include the financing or the appraisal contingency.
- Partner with an expert. Finally, consider having your real estate agent work with your seller’s agent. In some cases, this could expedite the purchase process.
The reason for this is simple. During negotiations, your agent will represent your interests while your seller’s agent will represent their interests. Your agent will focus on ensuring the success of your offer, while the seller’s agent will focus on making a successful sale.
Remember that your primary goal is to win the bidding. Having a real estate agent will give you the advantage of expert guidance throughout the process.
Even after going they all these steps, always leave room for negotiation. Whether you’re dealing with the seller or their agent, allowing some leeway for negotiation can give you an edge over the competition and help make your offer stand out.
About Blue Sky Insurance Agency
For over 20 years, family owned Blue Sky Insurance Agency has proudly specialized in insurance and tax services for Virginia residents. Our philosophy is simple: “If you can dream it, we can insure it.” We strive to provide value to our clients by establishing and building relationships and focusing on more than just rates. We are dedicated to providing holistic and strategically tailored solutions to protect all of your assets, and to provide peace of mind wherever life takes you. To get in touch with us, fill out a complimentary quote form, or call us at one of our two locations:
North Chesterfield
Phone: (804) 745-4044
PO Box 35674
North Chesterfield, VA, 23235
Hours of Operation: Mon-Sat 9am-6pm
Richmond
Phone: (804) 404-2030
9932 Midlothian Turnpike
Richmond, VA, 23235
Hours of Operation: Mon-Sat 9am-6pm