How to Submit the Best Offer on Your Dream Home

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shutterstock_110032925Buying a home can be as exhilarating as it is exhausting. After months of searching for your first (or next) home, you might have stumbled upon your dream home. This is a very exciting time, but it’s also a time for careful consideration of how to craft your best offer to increase your chances of the house becoming your home.

Pay Attention to Market Conditions

A buyers’ market, a sellers’ market; there are a myriad of factors that go into how a given real estate market is performing. Regardless of what it’s called, the basic rules of supply and demand apply here: For areas where there are plenty of homes on the market, your buying power is greatly increased. In areas where the supply of homes for sale pales in comparison to the number of people wanting to buy means that selling prices will end up being the same or higher than what’s listed. Be prepared to adjust your offer accordingly.

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Behold the Power of the Comps

Request that your buyer’s agent put together a list of comparable properties that have recently sold in the area where you’re looking to buy. Often called a Comparative Market Analysis (CMA), this information can be gold when it comes time to put a real number down on paper. Your comps research should include all properties similar to the one you’re looking at that have sold in the last few months, the final selling prices of the properties and whether or not the sales were foreclosure or short sale proceedings.

Size Up Your Seller, the Home and…Your Package

After you have all of the market information and the comps, you should next take time to analyze external factors such as the seller’s motivation (how long has the property been on the market? Is this part of a divorce or estate liquidation proceeding?), the state of the home (what obvious repairs can you note?) and the total buying package you’re able to offer (Do you have a mortgage pre-approval? Are you buying with cash? Do you not have a home already that you need to sell?). The better informed you are, the better offer you’ll make. This in turn sets you up for the best possible outcome (and helps you safeguard from any potential of insulting the seller with a lowball offer).

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Don’t Forget About Contingencies

When you find your dream home, it can be hard to regulate the impact of your emotions. Stay strong with your resolve to include the traditional contingencies such as final approval of financing, a favorable home inspection, etc. Considering that you may live in this house for the rest of your life, you’ll want to do every bit of due diligence possible to ensure you’re making a smart purchase.

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Jen is the owner of The Happy Homeowner, where she writes about living a healthy, balanced life one cent at a time. Previously, she paid off $14K in credit card debt in less than a year and hasn’t looked back since. Follow along on Twitter with her financial, fitness and travel adventures @bthhomeowner!