Once you have researched the market, viewed many apartment & home choices, and assessed what is important to you, there comes a time when you are ready to place an offer on your favorite home. Here are four steps in preparation for the process of making your initial offer.
I. Determine the Value and How Much You Will Offer
Research and review with your real estate agent:
–Similar sales activity with both current listings and recent & past sales in the neighboring area and within the building
–The property’s pros & cons and how that might affect its value.
II. Establish the Terms of Your Offer
Important components of an offer include:
–Terms of a sale include closing date, any inclusions (i.e. window treatments or light fixtures) or special terms (i.e. seller pays the flip tax), all cash sale or the amount of financing, and whether the sale is contingent on obtaining a mortgage. An offer that is either all cash or not contingent on financing is a considerably stronger offer and can sometimes aid in achieving a lower sale price.
–If you are financing, discuss the financing contingency with your broker and lender to find out whether waiving it is possible without taking undue e risk. In a seller’s market, a higher percentage of buyers often waive the mortgage/financing contingency when they feel certain that they will attain a mortgage.
III. Submit a Written Offer
It is a good idea for you to send your offer in writing to your broker to avoid any misunderstanding. It can be simple. Your broker will then submit the offer preferably verbally at first to gage an initial reaction from the broker or the seller and follow it with a written offer that would include the following:
Special terms, including basic employment information including recent employment history, job title & income, and overview of your finances.
Along with the offer letter, your broker includes your REBNY or other personal financial statement, mortgage pre-approval letter if you are financing and, if the offer is on a co-op where board approval is required, personal information about the buyer which is relevant to the purchase.
There may be times when you will be asked to submit the first two pages of your last two years federal income tax return and/or more detailed personal and professional information. In some cases, a direct personalized introductory letter from you as the buyer can be a distinguishing factor especially at the start of a negotiation. If carefully written, is often well received and aids in the negotiating process.
IV. Negotiations Begin
Once you or your broker place an offer, there is an inevitable back and forth that takes place. Every negotiation is different depending on circumstances, motivation and market conditions. In most cases a reasonable offer will elicit a counter-offer from the seller. It is common that offers and counter-offers take a place a few times until a price and terms of the deal are mutually agreed upon. A skilled broker will guide you during the negotiating process and work to secure for you the best terms especially the price.
With these four steps, you now have the basic information of what you need to make an offer on your next New York City home.
To learn more about the insider secrets and nuances of making an offer, contact me for a meeting or for a free copy of my complete New York City Real Estate Buyer’s Guide by emailing email@example.com or calling 212-937-7011.