Buyers Guide to Making an Offer on a Home in North Dallas TX
If you have found your dream home in North Dallas TX, it’s time to make an offer.
But how exactly do you make an offer on a house? How do you boost your chances with the seller in a competitive housing market, like North Dallas TX? If you are finding possible solutions to these questions, this guide will certainly help you. Let’s get started.
What Is an Offer Letter? What Does It Include?
An offer represents the prospective buyer's intentions in a legal document that must comply with the state’s housing and real estate laws.
A typical offer on a house includes starts with the basic information, like the price, residential address, duration of the offer, down payment amount, title/escrow services and offer’s expiration date.
This legally binding document also includes the following -
These are certain conditions that the seller should agree or counter upon before accepting your offer and closing the sale. Contingencies are included in an offer to protect the buyer. For example, you can include a contingency for a professional inspection of the home for sale with the ability to back out from the offer, in case of any problems that impact the home.
This is an advance payment that shows your seriousness towards buying the home. As soon as you make the payment, the house comes off the market and is no longer available to other buyers with a “pending” status on the MLS and other marketing vehicles. The earnest money can range between 1% and 5% of the purchase price with the amount influenced by the price of the home and other influences included in your offer.
An escalation clause is included in an offer to ensure that the buyer has the highest bid. For example, you can include an escalation clause that says, “I am willing to pay $450,000 for the house. In case, you (the seller) receive a higher offer from another buyer, then I can pay $1,000 over the highest bid.”
- However, an escalation clause has a dangerous side that many don’t consider requiring mitigation and planning to ensure you do not commit to a home price escalation beyond your deliberate intentions.
Role of your Texas Real Estate Agent in Making an Offer
In a hot real estate markets, buyers are getting stuck in a bidding war. In a cooling or cold real estate market strategy and negotiations becomes even more import. Therefore, it is very important for you to follow the right approach and seek the help of a professional North Dallas Realtor near you. He or she writes an offer contract with fiduciary responsibility towards your interests and helps you throughout the process of buying and closing on your dream home in North Dallas TX.
- Being experienced, your Realtor knows what exactly constitutes a good offer and what must be avoided to help you craft an offer that supports your home investment interests.
Typically, a real estate agent has a Residential Purchase Agreement (generic offer document), which serves the basis for creating an offer for you. This agreement includes all the basic and extended legal information that forms a formal offer. What is included is unique to each offer and related home in North Dallas.
This makes it evident that creating an offer with the help of a professional real estate agent helps you appeal to the seller while ensuring all the necessary legal information in the first offer is there to protect your interests as the buyer.
Under your Realtors guidance, you may also get to know the easiest ways to increase the chances of your offer getting accepted. Be it an offer based on price or reducing the number of contingencies, the real estate agent will guide you throughout the process to persuade the home seller.
Points to Keep in Mind Before Making an Offer to Purchase
When you are making an offer on a home in North Dallas TX, you should be ‘ready’. This implies that you must know what you can afford, have sufficient earnest money, and having a your mortgage loan pre-approval confirmed in writing.
In addition, there are other things that you must keep in mind:
Be quick when submitting your offer:
You may not be the only ones looking at the home for sale. There are other potential buyers that are looking and have interest. Be as quick as you can once you have decided emotionally and financially your desire to proceed with your future homes purchase. To avoid getting into the bidding war, don’t start the offer too high or too low.
- The state of the market (hot/cold) will influence the appropriate strategy so that you leave room for negotiation in your first offer and don’t over buy a home.
Identify seller motivation:
Your North Dallas real estate agent may learn why the seller wants to sell their house which may help in crafting the right offer that motivates the seller to accept your offer over any potential competing offers. For example, if the seller is in a hurry due to moving or out of state relocation, your offer can convey that you are happy with a shorter escrow period and closing date.
- Any buyer consideration that supports the seller’s interest will influence how your offer is received. And remember your consideration as a buyer to a seller does not always mean more money.
Sell first, buy later:
Listing your home for sale on the market before your buy is a financial strategy that frees your funds as wel as removes any need for a contingency to sell that enables your as a buyer to make an offer that is more likely to be accepted by the home seller. Initiating the buying process is a personal decision, but waiting until you get a committed buyer for your home, purchase a new home is something that requires patience.
A professional real estate agent, like Noah Gamer, can help you navigate the complete buying and selling process, to ensure you have all the information to make an informed decision with your best interests at heart, both financially and emotionally.
How to Negotiate the Price of a Home
No matter if it is a hot or cool market, negotiating the price with the seller is always recommended. As already mentioned above, plan your first offer with consideration for your cities market trends, and be prepared.
- Be aware but flexible with all of your contingencies mentioned in the offer contract. If the seller wants a quick sale, and you are able, choose a closing date that suits the seller’s preferences. This will add value.
- Ask the seller to pay specific closing costs which will reduce your bottom line.
How to Negotiate After the Offer Has Been Accepted
Negotiation does not stop after your offer has been accepted. There are several contingencies that require fulfillment and negotiation at any point. For example, the home inspection may reveal certain issues and the seller may be required to fix them prior to closing the deal, based on you the buyer’s goals. If the seller is moving out of state and has no time for the repairs based on closing, you can negotiate a price credit for further in consideration of those repairs and take care of the repairs yourself.
How to Beat the Competition in a Biding Situation
As stated above, a buyer may get stuck in a bidding situation, wherein your dream home in North Dallas TX is also other buyers’ dream home. The seller will receive more offers and the chances to accept your offer will be at risk.
Despite this situation, you can still try to beat the competition. Here’s how;
- Include an escalation clause in the offer.
Note: This comes with risk and requires proper contractual mitigation
Inform the seller that you will remove your financing contingency. This may help you close escrow faster, which may also be the seller’s best interest.
- Increase the earnest money percentage which shows intent.
- Review all of your contingencies and determine if they are all necessary. Removing any of contingencies gives the seller
- This again, comes with risk and pro’s/con’s should be considered before eliminating any contractual contingencies.
Never contact the seller yourself. Always have your Realtor do it on your behalf. Real estate agents have experience with different buyers and seller transactions, which are each unique and come with their own nuances . Communication during the escrow process is a major part of the Realtor’s fiduciary responsibility.
How to Make an Offer: The Process
While working with your Realtor, the offer-making process begins the moment you find your dream home and make your mind to make an offer to the seller. This is followed by -
- Your North Dallas Realtor appropriately drafting the offer contract based on your discussed instructions and obtaining your signatures.
- Writing an offer letter with the help of the agent and sending it to the seller’s agent.
Once the signed contract is shared with the seller, he/she will respond in one of the following ways:
Seller Accepts the Offer
Once both the parties have signed the offer letter and you are now finally on your way to buy your dream home in North Dallas TX.
But, before you become the official owner of the property, you'll have to go through all the steps that are stipulated in the contract before you can close. These include an appraisal of the house, home inspection for potential issues, legal disclosures by the seller, checking the title report, the lender's confirmation for financing approval, providing proof of insurance, taking the tour of the home after inspection repairs are completed, before possession, and removing any contingencies during each stage of the escrow process.
Seller Makes a Counteroffer
You can either accept, counter or reject the counteroffer.
What Is Meant By a Counter Offer?
When you submit your offer to the seller, he or she may not agree to some conditions stated in the offer. In such a situation, the seller will make a counteroffer to negotiate the terms of the sale with you.
For example, the seller may not want to repair or replace the roof but will reduce the purchase price by a few thousand dollars.
Depending upon the negotiation between you and the seller, you can either accept the seller’s changes or counter again. Generally, one or two rounds of negotiation can occur in residential real estate transactions.
Seller Declines the Offer
When a seller declines your offer it does not mean you cannot make your own counteroffer with a more appealing second offer or you can walk away and find another home for sale in North Dallas TX.
Taking Back an Offer
Most of the buyers often struggle with a question; whether they can take back an offer to purchase.
While creating an offer, your real estate agent can enter a duration of time the offer is valid. Once the buyers offer has expired without an acceptance from the seller, the offer will no longer valid. Ensure you qualify at what point you can repeal, cancel or revoke the offer.
In North Dallas TX, there is an "option period" where the buyer has the option to terminate the contract at any point. To leverage this option, the seller receives a certain amount of money (non-refundable) from the buyer.
Making Your Offer Count
Your offer can be an opportunity for a new home for you and your family. Especially, for a first-time homebuyer, this can be nerve-racking. When hiring a professional team of real estate agents, such as GAMER Real Estate Group that can guide you throughout the process, you are ensured your interests are always upheld.
From searching all of the homes for sale, scrutinizing the properties, compare it with others in the area, while reviewing the market, evaluate all contingencies and ensuring that your home buying experience is stress-free. They will navigating all your considerations, such as schools for your kids, to helping you make an offer, closing escrow and well after you have moved in, your Realtor should be with you. This is a relationship not just a transaction
Noah has represented many buyers and sellers looking to sell and buy properties across three states. When it comes to your North Dallas Realtor, you can’t do better than Noah and the Keller Williams Realty professionals at GAMER Real Estate Group.
Contact US to Learn More
The GAMER Real Estate Group is known for providing exceptional service, access to the most current home listings in the Dallas-Fort Worth Metroplex and helping you find the right home. Contact Noah today to get started on your home search in North Dallas TX.
Our promise to you is we will always uphold your interests to ensure your buying and selling experience, while supporting you in the biggest investment you will make.