You’ve seen every house on the market and you’ve finally found the spot you can’t wait to call home. In fact, you’ve mentally decorated it and planned your new life, down to the barbecues and block parties you’ll have with your awesome new neighbors.
Slow down there, dear buyer. As you know, you still have one giant hurdle to overcome: You have to make the offer that wins the house. And, in a highly competitive housing market, that can be easier said than done. Here, Realtor.com tells you how to make sure you don’t blow your chances with any of these common home offer mistakes.
1. Dragging your feet
If you love a property, the worst thing you can do is wait to make an offer. Of course, you’re allowed to have some feelings of uncertainty—after all, this is likely the biggest financial decision of your life. But the longer you vacillate, the greater the chances you’ll set yourself up for failure. Dragging your feet means you could wind up paying more in a bidding war situation of missing out on the property altogether. Not only should you be emotionally ready to pounce, but be logistically ready as well. That means pulling together all of your paperwork—bank statements, pre-approval letter, and any documents supporting proof of funds—while you are house hunting.
2. Offering your max pre-approved amount
Today’s sellers are often besieged by multiple suitors, and the successful buyer will be one who’s prepared for a bidding war. The best way to arm yourself for battle is to make sure you have a strong financial arsenal. That means getting pre-approved (do this now, if you haven’t already) to show a seller you’re financially prepared to buy a home. But, when you make an offer, beware of submitting a price that matches the amount you were pre-approved for exactly. Many buyers come in with a pre-approval for the exact offer price, but if you’re competing against other offers, including cash offers, you want to show financial strength. An exact pre-approval could make a listing agent nervous because not only does the buyer not have any wiggle room to negotiate, but they might no longer qualify if interest rates rise.
3. Using an obscure lender
Also consider using a well-known local mortgage lender or bank rather than online pre-approvals from out-of-state lenders or unknown online entities. Agents, and therefore sellers, are generally more comfortable with a local lender they know.
Trust your agent and bid accordingly—even if it means offering a little more than you think you could get away with. If you lowball the seller in the hope that it will spark a negotiation, it could backfire—especially in a seller’s market. A lowball offer that isn’t backed up with math or comparable sales data is disrespectful and could turn off the seller and possibly mean you will miss out on the property completely.
5. Waiving the inspection contingency
An inspection is the only way to uncover potential flaws that could cost major cash to fix. And if you waive the inspection contingency in your offer, you stand to lose your earnest money if you back out of the deal.
6. Letting outsiders sway your offer
When you’re buying a home, you probably want a second opinion. And probably a third, fourth, and maybe even 10th. We totally get it. But beware of letting these people—who mean well but haven’t seen the many, many other homes you’ve seen—influence your offer. Advisers will do what they think is best and try to protect the buyer, and usually will slam the home. Unfortunately, they don’t have the education in seeing the other 10 homes or understanding the market. If you’re going to rely on outside advice, then ask that the person accompany you through as much of the process as possible.
7. Not selling yourself
In a seller’s market, you want to make sure you—the buyer—look as good to the seller as that picture-perfect house looks to you. And it’s not just about looking good on paper. In fact, the offer process begins the moment the buyer steps through the door at the open house or showing. In today’s highly competitive environment, the listing agent is trying to determine which buyer will be the easiest to deal with. That’s why you should avoid pointing out defects, asking a lot of nitpicky questions or even insulting the owner’s taste by discussing changes you want to make. Basically, buyers who act less than enthusiastic will see themselves at a competitive disadvantage when sellers are comparing multiple offers. And, don’t forget to help seal the deal with a love letter—a personal touch could be enough to boost you to the top in the seller’s mind.