It’s a hot market, and you’ve received multiple offers for your house. The highest bid wins, right? Sometimes, but not always. A high-dollar offer might come with a lot of stipulations and other complications. Consider these questions when making your decision: What Are the Buyer’s Conditions? Buyers can put all kinds of things in an offer. They can request an option to terminate, ask for repairs, see if you’ll leave the appliances, and make the offer contingent upon the sale of their current home. Your REALTOR® can help you decide what is reasonable. How is the Buyer Paying? Without cash or a letter from a lender, your buyer may not be able to afford the price he’s proposing. Your REALTOR® can help you tremendously by making sure that anyone who places an offer on your home is qualified. Does Their Closing Date Line Up With Yours? If not, this leads to more questions: How flexible can you be? If your next home isn’t ready, are the buyers open to renting the house back to you? If so, how much would they charge for rent? How Much Earnest Money is Included? Earnest money is an amount a potential buyer will put towards the sale in advance of the closing to show he’s entering into this transaction in good faith. A high amount of earnest money usually indicates a serious buyer. If the transaction closes, the money counts toward the down payment; if it doesn’t close, the seller in some circumstances gets to keep the earnest money. Don’t forget to talk to your REALTOR® when reviewing offers to get additional insights on choosing the best offer.
You may not be ready to buy your first home, but that doesn’t mean you can’t prepare now. Here are three actions you can do while renting that will put you in a better position when you’re ready to buy. Test the Budget While you can’t predict all homeownership costs to the last penny, you can come up with a rough estimate of how owning a home will affect your budget. A REALTOR® can help you figure out how much you can afford, the potential mortgage payment you’d make, your local property taxes, and repair costs you might want to consider as a homeowner. Check your Credit Before you apply for a loan, request a free credit report to find out what a lender would see. If your report has errors, you can correct them before they affect your ability to qualify for a mortgage loan. And you might be able to take steps to improve your credit before purchasing a property. Create a Wish List There’s probably not a home that will offer every single amenity you desire, but you should have a general idea of what you’re looking for. So while a home with fewer than two bathrooms may be non-negotiable, perhaps you’d see the potential in one with a smaller kitchen or a not-so-appealing exterior paint job. It’s never too early to talk to a REALTOR® when you know you’re going to buy a home. A REALTOR® can answer your questions about the homebuying process and help you avoid surprises along the way.