Congratulations! You’ve found the home of your dreams.  But before you make a formal offer, you need to make sure the home is priced correctly. You don’t want to overpay.

Typically used when selling a home, a comparable market analysis (CMA) lists the recent sale information of nearby homes, including how long each home stayed on the market, how close the asking price was to the actual sales price, etc. It then compares the information regarding these houses with the one in question. If you’re using an agent, they will do this for you to help you determine a realistic price. There are several online appraisal services that can provide you the same information as a CMA.

As you go through this buying process, remember that everything is negotiable, and everything should be in writing. You should be very specific when you prepare your purchase offer, and the seller should be equally specific when they issue their counter offer. Don’t forget to think ahead in terms of the top price you’re willing to pay. It’s a very emotional time and making some decisions early on is a good idea.

Remember:

  • Don’t make a verbal offer.
  • Don’t offer full price unless the home is a real steal. You need room to negotiate.
  • Include home inspections. Make sure you have an “out” written into the contract if the inspection turns up major repair problems that cannot be resolved with the seller.
  • Make sure the contract includes an “out” in the event you cannot secure financing.
  • If you’re not using an agent, make sure you consult with a real estate attorney.

Earnest money proves to house sellers that you’re serious. After all, they’re going to take their home off the market on your behalf. Earnest money is typically between 1%-5% of the purchase price, but less is possible. The money should be held by an attorney or title company in escrow. Never give the money directly to the house seller. Such a deposit does not mean you’re bound to the contract. Your full deposit is credited toward the down payment and closing costs.

Related posts:

  1. Home Buying – Is A Low Ball Offer A Waste Of Time
  2. Home Buying Tip – Include A Deadline In Your Offer
  3. Home Buying – When You Can Bail On An Offer
  4. Making An Offer – How To Determine Your Starting Price
  5. Real Estate Tips – Winning With A Lowball Offer