New home buyers and sellers often have many questions. This article addresses two of the most common for buyers and sellers:
Buyer: What will lead to a successful home purchase?
Seller: Why would a seller accept the first offer?
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A successful home purchase requires financial preparation and wise practices. Adopting good financial habits can maximize your chances of a successful home purchase. Before starting to look for a house, do your best to live within your means. First, watch your credit card behavior. Avoid running up credit card debt, don’t use credit cards for large purchases (even if the interest rate is currently 0%), and keep credit card balances below 50% of the limits. You should also strive to be a habitual saver. Whether you’re putting away $50 or $5,000 a month, being a habitual saver will set you on the path toward successful homeownership. In addition to demonstrating a level of financial stability that a bank will want to see, it provides reserves for unexpected expenses.
When it’s time to buy, make a list of your goals and priorities, and keep them in mind while house hunting. Separate the list into needs/must-haves and wants. Next, find an excellent local real estate agent who can educate you on market trends—including the best times of the year to purchase—and can create a custom plan to guide you. Finally, work with a local lender to get your loan not just pre-qualified, but pre-approved and submitted to underwriting, to increase the chances of an offer being accepted.
Remember, while your purchase may not happen overnight, homeownership is one of the best investments you will ever make. Focus on your goal, and you will get there when you are ready.
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There are a number of good reasons why a seller might decide that the first offer is right for them. It all boils down to how well the first offer meets their expectations and needs.
Perhaps a seller’s agent has advised them that it’s a good offer and they’re unlikely to receive a higher one. In that case, accepting it could be the right choice. A seller may also have financial constraints. If they are in escrow on a contingency to purchase another home, the first offer can keep the purchase of a new home on track. A seller with financial needs may also appreciate terms such as all cash, a quick close, no contingencies, or perhaps a generous rent back. Relocation requirements can also impact the decision. A seller who must move to another area by a particular time, to start a new job or catch the beginning of a school year, may prefer a quick sale and closing.
The risk in accepting the first offer, particularly within the first 1-2 days that a house is on the market, is that the seller is potentially leaving money on the table. That's where a great agent can help, by letting the seller know if other, more desirable offers are likely to come in while keeping the seller’s needs in mind. Of course, the final decision is always up to the seller, but a great agent will make sure the seller understands all of their options prior to acceptance.
