Know the 10 steps that will allow you to create a winning offer

Your offer marks the beginning of an exchange between you and the seller, usually with the real estate agents advising both of you.

The more accurate your offer is, the better the chances that it will be accepted. Follow these 10 steps and you'll be set: It's a true story. (“The Godfather” again. We can't resist.)

1. Know your limits

Your agent will help you craft a winning offer. You can trust their advice on pricing, conditions, and other terms of the deal—it's a win-win relationship. The more you collaborate with your agent, the faster you can move.

But ultimately, it's you who decides what the offer will be, and you who knows what your financial and lifestyle limits are. When buying a home, we bring strong emotions along with business savvy into play, so now is a good time to go back to those “Must Haves” on your list.

• Do you have a ceiling on the price of your offer because you are also saving for retirement and love going on vacations to the beach? Stick to it.

• Do you want a vegetable garden or paint the outside of your house purple? Make sure your homeowners association (HOA) rules allow it.

• In addition to reading the HOA rules, find out how much the HOA has in reserve to cover common area repairs. You do not want to unexpectedly receive a settlement of extraordinary expenses.

• Do you want to live in a dog-friendly community? Make sure there are no weight limits on pets that will prevent you from living with your best (and gigantic) canine friend.

2. Learn the jargon of contracts

An offer is a contract. The documents used and their wording vary from state to state. Take time, using due diligence, to review offer forms before finding a home (LawDepot.com has sample sales contracts for each state). If you're a picky person, a real estate attorney can explain the documents in detail so you're familiar with their vocabulary when you're ready to submit the offer to your agent, who will make the offer forms applicable to your state available to you.

3. Set your price Houses always have a published price

Think of that value as the seller's initial offer in the purchase negotiation.

As a buyer, your offer will include a price. This is the first thing home sellers look at when they receive an offer. Your agent will help you determine if the seller's proposed price is fair by comparing the home you're bidding on with similar (comparable) properties recently sold in the neighborhood.

There are other factors that can affect your bargaining power and the price of the offer. For example, if the house has been on the market for a long time, or if it is in a market where supply exceeds demand, the seller may be willing to accept an offer that is below the originally published price. Or if the seller has already received another offer, that may affect the price you are willing to offer. Your agent will help you understand the context of the negotiation.

4. Calculate the down payment

To get a mortgage, you must make a down payment on your loan. For conventional loans (as opposed to government loans), making a 20% down payment allows borrowers to avoid having to pay private mortgage insurance (PMI), a monthly premium that protects the lender in the event the borrower defaults on the loan.

But 20% is not always feasible, or even necessary. In fact, the average down payment in 2019 for general buyers was 16%, and 6% for first-time buyers, according to the National Association of REALTORS®. Your credit institution will help you determine the best down payment amount based on your financial situation. Depending on the type of loan you get, that down payment may be 0%.

You may qualify for one of the more than 2,400 down payment assistance programs nationwide. Many of them make funds available to households whose income is equal to 175% of the area median income. In other words, middle income households.

5. Show the seller your commitment: make a deposit

An EMD, or good faith deposit, is the sum of money you give the seller as a demonstration of your serious and genuine interest in buying the home. If the seller accepts your offer, the deposit will go towards the initial payment at closing. However, if you try to back out of the deal, you may have to relinquish that cash to the seller.

A standard EMD is 1% to 3% of the home's sales price (so it would be $2,000 to $6,000 on a $200,000 loan). But depending on how active the market is where you live, you may want to put more money down in escrow to compete with other offers.

In most cases, the title company is responsible for keeping the money in an escrow account. If the deal falls through, the title company will distribute the funds according to the terms of the purchase agreement. These companies also check for any defects or damage to the title to ensure that it can be transferred free of any encumbrances.

6. Review Conditions and Contingencies

Most real estate deals include conditions and contingencies: clauses that must be met before the deal can go through, or the buyer has the right to back out of the deal with their EMD. For example, if an offer says, "This contract is subject to a home inspection," the buyer has a certain number of days after the offer is accepted to have the property inspected by a certified home inspector or with licence.

If there is a problem with the house, the buyer can ask the seller to make the repairs. But most repairs are negotiable; the seller may agree to some and say no to others. Or the seller may offer a price reduction or compensable credit at closing, depending on the cost of repairs. This is where your real estate agent can prove his worth and advise you on what to ask the seller to fix.

7. Lee la letra chica sobre la propiedad

El contrato de compraventa establece información clave sobre la propiedad, como la dirección, el número de identificación impositivo y los tipos de servicios públicos: red de agua pública o pozo privado, calefacción de gas o eléctrica, etc. También incluye una sección que especifica qué bienes muebles y accesorios el vendedor acepta dejar en la vivienda, como electrodomésticos, accesorios de iluminación y cortinas. El vendedor proporciona a los posibles compradores una lista de estos artículos antes de que presenten una oferta. Estos pueden ser otros aspectos para negociar.

Revisar cuidadosamente la descripción de la propiedad también te ayuda a saber, por ejemplo, si el vendedor planea llevarse esa isla de cocina cuando se mude. (Han sucedido cosas más extrañas).

8. Fija la fecha para el cierre

El contrato de compraventa que envíe al vendedor debe incluir una fecha de cierre propuesta, que confirme cuándo se finalizará la operación. El reloj comienza a correr a partir de la firma del contrato. Si el cierre se demora, la parte responsable de esa demora puede tener que pagar a la otra parte “intereses punitorios” a una tasa predeterminada.

9. Añade una carta personal para el vendedor

Apunta al corazón del vendedor con una carta personal, que puedes sumar a los documentos de la oferta. Cuéntale una historia conmovedora sobre tu familia y tu vínculo con el área. Además, los halagos sinceros pueden ser de gran ayuda. Felicita al vendedor por la renovación de su cocina, que se ve digna de Apartment Therapy, por ejemplo, o dile cómo las suculentas de su jardín te recuerdan a Palm Springs.

Tu agente puede ayudarte a recopilar antecedentes sobre los vendedores (por ejemplo, ¿están locos por su labradoodle, como tú por el tuyo? ¿Dirigieron un pequeño negocio desde casa, como tú sueñas con hacerlo?). Y, por supuesto, debes consultar la información que obtuviste durante la open house o la recorrida particular. Usa esta información para escribir una nota sincera, algo que realmente puede ayudarte a cerrar la operación.

10. Prepárate para una contraoferta

Si realizas una oferta que es baja o que se enfrenta a varias otras, puede que el vendedor haga una contraoferta: un nuevo contrato, quizá con un precio de venta más alto o con menos contingencias. Depende de ti si aceptas el nuevo contrato, haces tu propia contraoferta o te retiras de la negociación.

Estee Soto

Estee Soto is a real estate agent with eXp Realty, a certified mentor and eXp Latino ambassador, and the CEO and founder of TagCrush LLC, an all-in-one digital marketing platform for real estate agents. She leads the TAGHOMES team, specializing in luxury properties, new developments, and international buyers across Florida.

More information about Estee Soto HERE