How do you prepare to write an offer on a home?

It takes quite a bit of work and planning to be fully prepared to write an offer. There are three items or tasks every buyer should have or complete before writing an offer. They are:

  1. A pre-approval letter (if financing is necessary) or proof of funds (if paying cash)
  2. A CMA (comparative market analysis) for the desired property
  3. An offer strategy (particularly important with multiple offers)

 A pre-approval letter is an absolute “must” for buyers with financing. It shows you can afford the home and that a lender sees you as credit-worthy.  If you are making a cash purchase, the seller will want to see a letter or an account statement from your financial institution verifying you have the funds available to do so.  Our advice: don’t wait until you find the right house to talk to your lender and get the pre-approval letter.  Many agencies require you complete this step BEFORE you start looking at properties because they don’t want you to suffer the disappointment of falling in love with a property that your lender won’t approve. 

The CMA (Comparative Market Analysis) provides a detailed look at homes in the area that are similar to the one you wish to buy.  It tells you the prices they have sold for during the past 3-12 months.  It can also give you information about other currently listed properties so you can judge how the asking price stacks up against the one that interests you.   CMA are important because they give you objective evidence of what is a reasonable offer for the property.

An offer strategy is all about knowing what you’ll offer and understanding what the seller is likely to respond with. They may accept your offer or counter it or ignore it. You have to think it through in advance. It’s like playing chess – only more important.

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