Buyers Market: Making the Best Offer on a Home

Once you've found a home you like and have cleared the mortgage hurdle, it’s time to start thinking about the negotiating process. This requires careful planning in order to improve your chances of making a successful offer. You also need to take home closing costs into consideration.

Wondering how to negotiate with the seller? Keep the following tips in mind before you make your offer:

• Try to limit contingencies if possible. Contingencies make offers less desirable to sellers, so try to avoid them if you can. Contingencies include things like home sale contingencies, where you have to sell your home in order to afford to buy a new one, and home inspection contingencies, which state that you don’t have to go through with the purchase if the inspector finds major issues.
• Handle home closing costs carefully. Obviously, you don’t want to pay the entire amount of the closing costs if possible, but asking sellers to cover part of them could hurt your chances of having your offer accepted. If you do plan on asking the seller to pay for part of the closing costs, you can sweeten the deal a bit by being flexible about the closing date.
• Make a cash offer if you can afford to. This isn't possible for most home buyers, but a cash offer is the best way to ensure that your offer is accepted. If you do make a cash offer, you don’t have to get an appraisal done, but you might want to consider doing so anyway in order to make sure that you’re getting a good deal.

Looking for additional information on negotiating a home offer and understanding home closing costs? Call me!

Why buy? Homeownership still offers advantages over renting.

Faced with college loan debt and a tight labor market, many Millennials in their 20s and early 30s are putting off purchasing a home. According to U.S. Census data, home ownership for Americans under age 35 declined to 36.2 percent in the first quarter of this year. Another 36 percent of young adults ages 18 to 31 live in their parents' home. Others rent – which raises the question, "Does it make more sense to rent or buy?"

Buying a home still makes sense.
Although increasing home prices in some areas might make renting seem attractive, home ownership offers many benefits – financial and otherwise. In a recent New York Times article, Neil Irwin noted that "thanks to low interest rates and home prices that remain 13 percent below their 2006 peak nationally, buying continues to look like a good deal in much of the country."

Five advantages of buying over renting
Every market and every prospective buyer are different, but here are some benefits of buying a home:

1. Equity
In the past 20 years, the median sales price of existing single-family homes rose 81 percent. For those who plan to stay in the same place for at least five to seven years, the increase in value can often offset the costs of buying the home. When that equity grows, the homeowner may be able to borrow against it for major purchases or educational expenses.

2. Predictable payments
Rent payments can increase steadily or suddenly. With a fixed-rate mortgage, buyers pay the same amount each month no matter how many years they live in the home.

3. Tax deductions
Many home buyers can deduct mortgage interest and property taxes on their tax returns. Those who work at home may also be able to take home-office deductions.

4. Control
Unlike renters, homeowners can paint their walls any color they want and don't need to ask a landlord for permission to hang pictures or renovate. For many, that's priceless.

5. Pride of ownership
Buying a home is an investment, but also so much more. It's a lifestyle choice and continues to be part of the American dream.

  

The majority of the approximately 80 million Millennials have not yet made the move toward home ownership. A Realtor® can make them aware of the advantages of buying a home and encourage them to speak with a Mortgage Advisor, who can help them understand what they might be able to afford. Great first steps!