I recently talked to a first time home buyer who lost out in a multiple offer situation. Her offer didn’t stand a chance and her agent was too inexperienced to give her good advice. Most new agents don’t know what they don’t know and the same is true with first time home buyers.
Agents don’t always ask for help or even admit that they are new and need help so that we can help them.
Here are a few things home buyers need to know:
- In a multiple offer situation there won’t be any negotiating. The seller will accept the best offer.
- An offer is not a full-priced offer if the buyer is offering the list price and asking the seller to pay closing costs.
- In most cases $1000 dollars earnest money is not enough.
- Making earnest money refundable to the buyer if there is a problem with financing makes the offer weaker. There is a better way.
- Asking for a closing in three months may weaken an offer. Find out how soon the seller wants to close.
- Offers without pre-approval letters are seldom considered.
- Offers that are contingent on the sale of the buyer’s home are undesirable to most sellers.
- If the house needs a lot of work FHA financing might not work. Please ask your lender about FHA appraisals.
- Sometimes you have to walk away. let some other buyer overpay.
- Sellers are rarely motivated to take an offer that is less than full price the first day on the market.
When a home seller accepts an offer the home is more or less off the market. Sure people can see it but usually, there is little activity once other buyers know that the home has a contingent offer on it.
I’ll never recommend skipping the home inspection as some buyers do to make their offer more appealing. Inspections protect sellers and buyers and I think it is crazy to buy a house without an inspection.
Working with an agent who hasn’t worked with a buyer before or who has little experience will put the buyer at a disadvantage over other buyers who are working with an experienced agent.
There are so many situations that arise when buying or selling real estate. I wish I could say that it is a simple process but it is not. Getting advice from friends and family is fine but it is important to understand that real estate is local. Laws and business practices are different in each state.
Laws an business practices change and so does the housing market. Parents need to understand that what worked for them 10, 15 or 30 years ago may not work in today’s market.