Things to know before writing a home-purchase offer
Offer date deadlines for Boston condos for sale are becoming a thing of the past. Typically a way to corral multiple offers, these deadlines have traditionally been a great way to give sellers as much leverage as possible with respect to countering buyers and driving up the price.
But listing agents are increasingly encouraging buyer agents to simply submit strong offers prior to any sort of offer date. Inventory is growing; there are almost 200 single-family homes and 600+ condos on the market for 21 days or more as of this writing. Rising interest rates and the slower summer market are adding up to a situation where there is no landslide of buyer interest.
Counting on an offer date and multiple offers is not something a seller should be doing this summer. If a buyer transpires who submits a clean offer at an acceptable price, a seller should seriously consider taking that offer.
Some Boston condos for sale are moving more quickly than others, going into contract only a few days after hitting the market. Buyers looking to beat the competition on properties that check all the boxes and are in good locations should be prepared to move quickly and not wait around for an offer date.
Making an offer on a Boston condo for sale isn’t something you do on a regular basis, so your bound to be questions and maybe even a little anxiety. After all, buying a home is one of the largest financial investments in your life. With Boston real estate still being waht it is in downtown Boston, you may feel like the cards are stacked against you as a Boston condo buyer.
The followng are simple steps you can take, though, to give yourself as much control as possible when presenting an offer on a Beacon HIill home or a Boston Back Bay condo. In this Boston real estate blog post,, we’re sharing our best tips to help you navigate the process of making a winning home offer and increasing the chances of getting the home you want.
Okay, we know that most people can’t buy a Boston condo for sale outright. In fact, in most cases, real estate cash purchases are done by investors, not families or single home buyers. But it’s worth a mention because money talks, and a seller may be more likely to take an offer that’s under the asking price if they know it’s going to be a cash sale. Buying with cash also removes the whole financing piece of the transaction and speeds up the sale.
Before you start Boston condo for sale hunting in earnest, it’s helpful to take the time to get a pre-approval letter from your lending institution. While this won’t be a guarantee that you’ll be approved for a particular home you have in mind, it’s a great way to know your price parameters. It also lets the seller know you’re serious and prepared. Getting a pre-approval letter can take anywhere from 1-3 days, a small amount of time on a step that will only work in your favor. Before you start this process, talk with your Boston real estate agent. We have excellent recommendations on lenders that we’ve literally used hundreds of times, lenders we know will make the process as easy for you as possible. Rates are important, but they are not everything. As an experienced agent (licensed since 2003) I’ve seen plenty of lenders fail to finance a purchase, either because they didn’t close on time or due to a paperwork or accounting error, leaving the buyer in a terrible spot.
Ask First. Have your Boston condo buyers agent ask what the seller would like to see in an offer BEFORE the offer is written up. Perhaps the seller is interested in a long or short closing date. Perhaps the seller is going to insist on selling the property as-is (this doesn’t mean you have to waive your inspection period). Perhaps the seller wants to exclude certain personal property items from the sale – the list goes on. The best thing to do is ask first, then write up the offer.
Don’t panic. It’s very common for a Boston condo seller to make a counter offer. If this happens, don’t panic. Sometimes counter offers are for a higher dollar amount, and sometimes they’re about closing dates, contingencies, and inclusions and exclusions. They can also be a combination of any of the above. Go in with an open mind and be willing to budge on some of your initial requests. Also, respond FAST, in a hot sellers market the seller can rescind (pull back) their counter offer anytime prior to your acceptance or buyer counter back.
Do not waive the home inspection. Never waive a home inspection. The last thing you want is to find yourself legally attached to a sale on a property with major issues or an appraisal value far beneath what you’re offering. Read more more about alternatives to waiving a home inspection.
Do not waive the appraisal contingency. We also recommend never waiving the appraisal contingency, or at least putting a cap on the amount you’re willing to contribute in cash. Never, ever write a blank check. Let’s say you agree to pay 600,000 for a home and waive the appraisal contingency but only have 20,000 in extra cash lying around. The home then appraises (because you have to get an appraisal to get a loan in nearly every circumstance) at a mere 550,000. Now you are in breach of a legal contract and potentially in serious hot water (the seller could sue you and win). Put a cap on the amount you’d be willing to cover in an appraisal gap (difference between your offer price and what the bank is willing to lend you
Do not use an escalation clause unless you’re willing to pay top dollar. Many sellers will see the top amount you’re willing to pay and simply counter your offer back at that high, high amount. Escalation clauses tip your hand and let the seller know how much you’re willing to pay. It isn’t the best negotiation strategy, though in a highly contested multiple offer situation, we do occasionally write them up for our clients. What is an escalation clause? Summarized it is saying this lower price X is my offer, but if you can prove to me there are higher offers, I’ll pay $1,000 more than their offer up to a max of X.
Be sure you have an experienced, well-informed real estate agent helping you with your search and purchase. A good agent will know how local lending institutions operate. They’ll also be able to guide you in your overall offer, based on their years of experience. Check out our Boston Condo reviews here
The real estate market shifts and changes often. We’ve especially seen this over the past couple of years, due to the COVID-19 pandemic. Do what you can to educate yourself on the current market, no matter when you start shopping around.
It’s easy to get discouraged while Bosron condominium hunting, especially when the market is competitive. But don’t lose heart! It’s possible to find what you’re looking for, especially when you work with a knowledgeable, experienced real estate agent. Things can change fast—even overnight—and you might wake up to find that your dream home just went on the market. When this happens, it’s good to know what you need to make the process go as smoothly as possible.
Contact a Ford Realty staff member today at cell/text 617-595-3712
Things to know before writing home-purchase offer
There is no foolproof strategy for buying a property at just the right price. There are several reasons for this. In the first place, although the listing inventory is high in most places, sellers are not equally motivated to sell.
There are sellers who would like to sell, but who don’t have to sell. If they don’t get their price, they either stay put or rent out the property until the market turns. Sellers who don’t need to sell are often resistant to negotiating the price.
Motivated sellers, on the other hand, need to sell. They could be transferred by their employer and have to relocate quickly. Or, they might be facing financial hardship. Or, perhaps they have already bought another home. These sellers have a deadline to meet. They are usually open to considering all offers.
Another factor that will affect what price you decide to offer is the condition of the local real estate market. National, statewide and even regional home-sale trends may not apply to your neighborhood. For instance, in Alameda County (home to Oakland, Calif.) the median home price was down 2.2 percent between November 2006 and November 2007. However, just across the bay in San Francisco County, the median price jumped 6.9 percent during the period, according to DataQuick Information Systems.
HOUSE HUNTING TIP: Before making a decision on how much to offer initially, investigate your local housing market. Find out as much as possible about the most recent sales in your target neighborhood.
Did homes similar to one you’d like to buy sell for close to the list price? Or, did they sell for much less, or maybe even for more than the seller asked? Do you have a lot of inventory to choose from, or is the kind of house you’re looking for in short supply? Your real estate agent can help you collect this information.
Look at sales information for the past six months to determine if prices are rising, steady or declining. If prices are dropping, a low initial offer price is warranted. Where prices are holding or rising, you may have less opportunity to buy at a discounted price.
Try to find out if there is flexibility in the list price. Your agent might be able to get a sense of the seller’s willingness to bargain by having a discussion about price with the seller’s agent. Ask your agent to present your offer in person to the sellers and their agent, if possible. This can provide your agent an opportunity to find out if there is hope for reaching a satisfactory resolution, or if further negotiation is a waste of time.
Your first offer can make a big impact on the seller. Very low offers are sometimes rejected outright. In this situation, give the sellers time to cool off. Then, raise your price some and make another offer to show your sincerity.
An ideal offer price is one that is close enough to the seller’s ideal price that they won’t risk losing the opportunity by countering back with a higher price. However, since many sellers counter any offer that is lower than the list price, you might want to offer less than you’re willing to pay so that you can increase your price when the seller counters. That is unless you’re competing with other buyers. If you are competing, your first offer may need to be your best offer.
When there is a chasm between the buyer’s and seller’s price, counteroffering back and forth can bring about the desired result. But, it requires patience and fortitude.
THE CLOSING: You need to stick to your price — or close to it — and be willing to walk away if you don’t reach a meeting of the minds.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.