Buying a house is often the largest purchase most people will make in their lifetime, and therefore is not a decision to be taken lightly. Once you decide that you are ready to make an offer on a home, there are fours extremely important things to keep in mind.
Rule #1: Know what you can afford.
Before you make an offer to buy a home you should first speak with a mortgage professional. This is important for two reasons. The first is that you will have an idea of the size of loan that you qualify for and what you can afford. The second is that sellers will take your offer more seriously if you are pre-qualified for the loan necessary to close the transaction. Without a pre-approval letter, sellers may not consider your offer legitimate. In a competitive real estate market, bidding wars are common. If you know what you can afford and you understand what your maximum price is, you will be in a position to close if your offer is accepted.
Rule #2: Don’t sacrifice too much just to get your offer accepted.
Inspection contingencies exist for a reason. Most sellers would prefer to sell their home without contingencies, but that does not mean that you should buy a home without doing your due diligence. If you waive your inspection contingency, you are making a huge gamble. You may think that you are paying one price to purchase the property, but you may end up spending much more than expected if you find damages to the property that would have been found in the home inspection. You should know what you are paying for. Get a home inspection.
Rule #3: Know what the house should sell for.
Buying your home at the right price is crucial to its long-term investment value. You should evaluate the comparable sales in the area and determine the top price that you should pay. If you are working with a Realtor they should provide this for you. Once you determine what the home should sell for, you can make an informed decision on what you want to offer. However, in highly competitive offering environments, you may have to pay more than you believe the home should sell for.
Rule #4: Put your best foot forward.
Selling a home can be a very emotional experience and often times sellers want to sell their home to someone that will appreciate it like they did. This means that if you happen to meet the seller, it would not be a good idea to explain how you are going to gut the house and start over. Instead, you could explain how excited you are to make the house your home and how comfortable you are going to be in it. Furthermore, never underestimate the power of a heartfelt letter to the sellers.