If you have found a home that you absolutely love, you may be ready to make an offer. However, you may likely have to compete with several other offers for the same house. Here are a few tips to increase your chances of a winning bid.
Get Pre-approved for a Mortgage
Before you start making any offers on a house, you should first get pre-approved for a mortgage loan from a lending company. In addition to finding out how much you can actually afford, a pre-approval letter will give you a competitive edge. The seller knows that you’re serious about buying the home and have the money to pay for it.
Make a Fair Offer
A mistake some prospective homebuyers make is submitting a lowball offer. They might think that they have a chance of getting a house for a low amount. However, this rarely works and will likely offend the seller. Therefore, if a house is worth $300,000, don’t offer $150,000. If you want any chance of winning your bid, you must make a respectable offer.
Don’t Offer Your Full Pre-approval Amount
Just because a lending company has approved you for $250,000, does not mean that you should offer that full amount for a home. Doing so may hurt your chances of winning your bid. If interest rates rise, for example, you will not qualify for that loan amount anymore and will have to take back your offer.
Leave Your Emotions Out
Purchasing a home can be quite an emotional process. You may fall in love with a home and desire every feature in it. However, this can cause you to overpay. No matter how much you may love a home, you should never pay too much for it. If you leave your emotions at the door and recognize that it’s just a house, you won’t overpay.
Offer a Bigger Down Payment
If it is feasible, consider offering to pay more down for the home. If you can offer a larger down payment, it will show the seller that you’re financially stable. The seller will know that you are serious about the purchase and won’t back out.