Nervous about making an offer? Here’s something that can help you
It’s entirely natural to feel anxious when making an offer on a house, given that it’s one of the most significant investments you’ll make in your lifetime. In fact, the process of making an offer on a home can be an emotional rollercoaster, fraught with excitement and anxiety.
To alleviate some of this stress and boost your confidence, it’s essential to arm yourself with knowledge, preparation, and the assistance of professionals who can guide you along the way.
Here are some tips to help.
Understand Your Concerns
First, pinpoint the source of your feelings. Some home buyers struggle with doubt that they are ready to make such a big commitment. Others are scared of committing to a home that turns out to have unforeseen problems that require expensive repairs. Many first-time homebuyers simply feel overwhelmed by the complexity of the buying process itself, from understanding mortgage details to navigating closing costs and insurance necessities. When making an offer in a competitive market, some home buyers find that they also fear rejection or being outbid.
The overwhelming volume of information new buyers face, paired with the pressure of making such a monumental life decision, can make the offer phase intensely stressful. If you can point to the particular reasons you feel scared, then you can find the information or assistance you need to overcome those feelings and move forward with confidence.
Build a Team of Experts
If you are new to home buying, one of the best ways to allay anxiety is to work with a team of trusted professionals who know what they’re doing.
Real estate agent
Your real estate agent will be your partner throughout the entire process. Don’t just work with the first agent you meet at an open house. Choose your agent carefully to ensure that they’re a good fit and that they have the skills to help. Do a little research — look at their website, check reviews, even ask for references. Find out their area of specialty. How familiar are they with the particular area where you’re looking to buy? Make sure they have the expertise you need.
The reason it matters so much that your agent is a good fit is that they will be an important guide for you throughout the process. They will research the market, find homes for you, explain your options, arrange inspections, submit your offer, advocate on your behalf, and represent you at closing. They should be honest and unbiased and truly want to assist you. You will want to make sure they listen, understand, and respond to your questions in a timely manner. It’s their job to help you find and secure a home that suits your needs and budget. Choose carefully and engage a trusted real estate agent who can guide you through the process and offer valuable advice.
Mortgage account executive
Another important team member is your mortgage account executive. This person also will listen to your needs and guide you through your options for home financing and related topics. Don’t hesitate to reach out to someone at the mortgage company you are considering. They should respond quickly and be happy to help.
With these two team members buy your side, that will go a long way to overcome feelings of anxiety and stress.
Consider Your Stability and Future Plans
Face the question “Am I ready to buy a home?” head-on. One major aspect that goes overlooked is your job. How long have you been at your current job? Do you plan to stay there or will you be looking for a new job that might take you somewhere else? Where will your career take you in the next five or 10 years?
If you’re moving to a new area for a new job, do you have a firm job offer yet? Have you considered the whole picture before accepting it? Salary is a major factor, of course, but consider everything from vacation time to the atmosphere and amenities in the area where you are thinking of moving.
Research your potential employer online and read reviews on how people like working for that company. Feel free to ask the hiring manager any questions you may have about the job offer, and be certain of your plans before committing to homeownership in that location.
Arm Yourself With Financial Information
Next, ensure that you have a clear understanding of your own financial situation and what you can afford; this will help ground your decisions in reality and prevent overextending yourself. To determine how much home you can afford, you can speak with your mortgage account executive or gain a quick estimate yourself through mortgage calculators or a quick Pre-Qualification process that you can complete online in 10 minutes or less. The answers can help you feel confident that you are tailoring your search to properties that you will be able to comfortably afford.
Related read: A Comprehensive Guide to Buying Your First House
Stay Firm
Once you have an idea of your finances, stick with your budget. Practice patience and try to keep emotions in check; the right home for you is out there, and making rushed decisions out of fear is often what leads to regret. Focus on what’s within your control and be prepared to walk away if a deal doesn’t meet your critical needs or feels wrong.
Making the Offer
Once you have gathered information and a team, it’s time to look at houses. Knowing what to expect when you’re ready to make an offer on a home can help you move forward with confidence. The goal is to make a reasonable offer that has the best chance of being accepted.
Research and Understand the Market
Now that you have a firm handle on your own situation, start researching the housing market in the area where you want to buy a home. Analyze recent sales of similar properties in the area to get a sense of the going rate. This data will serve as a valuable benchmark when determining your offer price. A list of the deals closed in the last six months should be good to make a comparison. Make sure you get the sale prices, not just listing prices. These will let you know if the number on your mind is too high or too low.
Understand the Property’s Status
Once you find a home you’re interested in making an offer on, find out about the property’s listing history. How long the home has been on the market? A home that has been on the market for an extended period or has had price reductions might indicate a seller who is more motivated and potentially more open to negotiation. On the other hand, a home that has recently listed and is in a high-demand area may attract multiple offers, suggesting that your offer needs to be highly competitive. Reviewing the listing history allows you to gauge the seller’s situation and tailor your offer accordingly.
Pre-Approval Matters
Strongly consider getting a mortgage pre-approval when you start looking in earnest. Having a mortgage pre-approval in hand not only clarifies your budget but also signals to sellers that you’re a serious and financially prepared buyer. This could make your offer more appealing compared to those from buyers who haven’t taken this step.
Decide What’s Important to You
Besides putting forth a number, making an offer can also be the perfect time to talk about the terms and conditions of your deal. This can include things like:
- When you’re planning to have an inspection on the property
- Whether you’re looking to close as soon as possible or if you would need some time
- Closing conditions given by your financing company.
Remember that your terms and conditions could also make or break the deal, so prioritize what matters most to you.
Craft a Compelling Offer
Your offer should be competitive but also leave some wiggle room for negotiation. It’s not just about the price; consider other aspects like the down payment, closing date, and contingencies. Tailoring these details to the seller’s preferences can make your offer more enticing. While it is natural to expect a comfortable deal for yourself, there is no harm in nodding on a few conditions of the seller if you want your offer to be accepted. Let’s say your seller wants to close the deal quicker than you want to. If you’re able to get the financing done by then, don’t drag it along.
Sellers are often looking for offers that ensure a smooth and swift transaction. If the market is competitive, you can make the offer more attractive by minimizing contingencies, such as not having the sale contingent on selling your current home. Understanding what appeals to sellers and crafting an offer that not only meets their financial needs but also provides convenience and certainty can significantly increase your chances of success. Your real estate agent can help you determine what the seller is looking for.
Show Your Commitment
In a competitive market, showing your commitment to this particular property can give you an advantage. Offers that are flexible, such as those willing to coincide with the seller’s timeline, can stand out from others. Cash offers are particularly compelling as they remove the uncertainties associated with loan approvals and often promise a faster closing process. Finally, earnest money deposits that are higher than standard show the seller a serious commitment, making such offers more appealing.
Personal Touch Can Help
In some cases, adding a personal appeal through a letter to the seller can make a difference. Sharing why the home is perfect for you and your plans for it could resonate with the seller’s emotional side, potentially giving you an edge over other buyers.
Stay Flexible and Prepared for Negotiations
Rarely do first offers get accepted outright, so be prepared for some back-and-forth. Making an offer is just the beginning of a negotiation process. The seller may not accept it, and they may respond with a counter offer. Flexibility on your end, whether it’s about the closing date or minor contingencies, can be key to successfully securing the home. Your initial offer might not be accepted immediately, but it opens the door to discussions that could ultimately lead to your future home.
Stay the Course
If your first offer is not accepted, don’t lose hope. Trust in the process and in your preparations to carry you through. Learn from every offer you make and it won’t be long before you make an offer that will get you into the home of your dreams. Navigating the process of making an offer on a house can be complex, but with the right preparation and approach, you’ll be well on your way to landing your dream home.
Keep Your Mortgage Company in the Loop
When you’re ready to make an offer, make sure that you have your account executive updated. They will need information on the property if your offer is accepted. If you are already pre-approved, not only will that make your offer more appealing to the seller, but you will also have less work to do later.
Ready to Make Your Move?
Guidance Residential’s co-ownership model of Islamic home financing remains the #1 U.S. Islamic home financing provider, with more than 40,000 families assisted over more than 20 years. Learn more and get started on your home finance journey today.
Your Guidance Residential Account Executive is here to help with any questions. Looking to refinance or purchase? Have a friend or family member who is looking for a home? Call 1.866.Guidance, or start an application today.
Originally published in October 2015, updated February 2024.
