Steps to
Buying a Home

 




The Offer

The big question of course is . . . how much should you pay? Unfortunately, there's no easy answer. But if you're somewhat systematic about the way you approach the question, you may be able to take a bit of the anxiety out of the decision.

If the seller's asking price is more than you can afford . . .
don't make the offer. That seems obvious but buyers have been known to become irrational. You should have a clear idea of how much you can pay each month for housing while still being able to sleep at night. Stick to that number.

On average, in greater New Haven . . . a piece of real estate sells for about 95% of its asking price. Offers for much less than 95% of the asking price will probably be rejected or countered.

Because I'm in constant touch with the market, I'll be able to advise you quickly as to whether or not the seller has set a reasonable price for the home you're interested in. I'll also do a reality check on my opinion by running a quick comparative market analysis (CMA), using data about recent closings on similar properties in the immediate area of the home you'd like to buy.

If we conclude from this process that the home is fairly priced, you should probably make an offer at least in the range of 95% of the asking price and be prepared to receive a counteroffer.

If the home is overpriced . . . has been on the market for a long time or will clearly require significant work to bring it up to your standards, it may make sense to put in a lower offer. You're not likely to be successful in attempting to steal the place, but you may get a good deal if the circumstances are right.

To be enforceable, the offer must be in writing . . .
It's usually a standardized contract which specifies:

Your offering price . . .
Your cash deposit (5% is a good deposit) . . .
The type and amount of the mortgage you plan to obtain . . .
A deadline for the home inspection and your response to it . . .
A deadline for a mortgage commitment from your lender . . .
The date by which you intend to close and take possession.

Additional terms and conditions . . . (e.g.. "Seller agrees that the Ferris Wheel is included in the price of sale.") may be put into an addendum to the standard contract. If you wish, we can include a clause that makes the offer contingent on review and approval by your attorney.

The offer will also include . . . a copy of the Residential Property Condition Disclosure forms which, by your signature, you acknowledge having read, an initial deposit check and a pre-qualification letter from your mortgage broker or lender.

Sometimes it's a good idea . . . for you to write a personal note that mentions features of the house that appeal to you and shows your understanding of the emotional attachment the sellers may have to the home that they're leaving.

Be aware . . . that the standard contract calls for a second deposit check to be delivered on the seller's acceptance of your offer. Your willingness and ability to put down a meaningful deposit will make your offer more appealing to a seller since it demonstrates both seriousness and financial strength on your part.
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