THERE IT IS… You’ve finally found it: A beautiful, large new home for your family.  It’s in that perfect neighborhood in Maryland that you absolutely adore, the one with the great school system.  It’s the home with the perfect architectural style and lots of room for entertaining guests, with just the right amount of bedrooms and storage and features that you’ve longing for.

IT IS YOUR DREAM HOME!

It would have been perfect for you, but now there’s only one problem – you’re not quite ready to pay the price the seller is asking for it.  You’ll have to put in an offer below the seller’s asking price, which is potentially a risky move.  In the worst case, a “low” offer has the potential to actually offend the sellers, and might make further communication and willingness to compromise more difficult.  But even at a minimum in just about in all cases, a lower then asking price offer is simply less likely to be accepted.

So even though you may be rolling the dice with an offer below asking price, there are a few ways that you can increase the likelihood that your offer will be successful, or at the very least can start a more positive “conversation” with the sellers regarding the purchase of the home.

Quite simply, your best move when submitting a “low” offer is to set up the other “non-monetary” terms in your offer to best fit the sellers wishes and current situation.  This may require some investigation on your agent’s part… but if you have a GOOD agent they will know exactly what questions to ask and they will be able to find out which of the seller’s “hot buttons” is most important to them.

This strategy really helps to show that you’re willing to compromise on other terms – and that way, you come across as a reasonable human being and not just a bargain hunter.  By offering to give the seller the better deal on terms other than sales price, you’re showing that you truly want to close a sale and that you are flexible and take the sellers interests to heart – then in turn the seller will hopefully see that you are making an effort to come to an agreement and respond more positively to your offer.

Some examples of other terms that won’t cost you any money but may help the sellers look at your offer in a more positive light include:

• Being flexible with the settlement date.  This is a great start and could be a huge “difference maker” depending on the seller’s situation.  For instance, the sellers might prefer to settle quickly (i.e. they may have already purchased another home), or they may want a little bit of time before they settle (i.e. they might have to still find a home).  If you’re flexible with your settlement date, you may be giving the sellers just the right amount of piece of mind that they may not have to rush to find another home, or in some cases pay extra house payments, and either way makes their transition out of the home as stress-free as possible for them.  This one item alone could be more important to them than a few thousand dollars off the sales price.
  

• Submitting an offer with a higher earnest money deposit then normal is another quick way to strengthen your offer.  A higher deposit typically communicates to the seller that you are a more serious buyer, and at the same time communicates that your qualifications may be stronger just by the mere fact that you have a good chunk of money in your possession to make such a move.  In the State of Maryland, as long as your agent writes in the proper contingencies to the contract, your deposit is almost never put in the jeopardy of being forfeited, so it’s fairly risk-free!
  

• Having your inspection deadlines sooner then the average timeframe is another way to make your offer stand out.  The average timeframe in Maryland for inspections to be completed is usually 15-20 days after contract acceptance.  Considering that the home inspection is the item that causes most deals to fall apart, having it done quickly lets the seller know that they will have a more “solid” deal quicker, and won’t spend unnecessary time off the market while waiting for an inspection, that could potentially end the deal.
  

• A couple more simplistic but often overlooked items should include:
  

• • Submitting a STRONG pre-approval letter (not pre-qualification) with the offer from a local mortgage lender.
    

  • Making that mortgage lender available to the seller’s representatives for direct communication regarding your qualifications and thereby solidifying your ability to obtain the mortgage for the home.  A good lender will know how to relay your strengths as a buyer without revealing personal information to the seller’s side.
    

  • If you’re comfortable with it, showing a copy of your bank statement showing that you have the funds needed for settlement already in the bank is a very strong play.  This really helps the sellers know that they are dealing with a buyer that is truly “ready to go”!
    

Submitting an offer below asking price can definitely work, but it’s not something that should simply be done on a whim.  It takes careful planning, a great strategy, and an experienced, quality agent guiding you in writing an offer that has the best chance of getting accepted.

When you are ready to find your dream home, turn to Ryan Sullivan of ExecuHome Realty.

Ryan Sullivan, Realtor – 443-513-0122 – Ryan@RyanSullivanRealtor.com – www.RyanSullivanRealtor.com

ExecuHomeRealty – 443-632-3000

Eqaual Housing Opportunity

If you’re in the process of buying a home, you probably have your deposit and monthly mortgage charges in a spreadsheet, along with a chart of your other expenses and your monthly income.  However, throughout the home buying process there are lots of different costs that will come into play – and it’s easy to forget something.  When you’re preparing to close on your new home and trying to understand “exactly” how much money your truly going to need,make sure you consider these three closing costs that most buyers forget: 

1.  Home Inspection Fees: A Small Charge For Peace Of Mind

Most Maryland home purchase agreements are contingent upon a successful home inspection – and if you’re planning to buy a home, you should definitely have it inspected before you buy it.  However, home inspectors don’t work for free, and you’ll have to pay a home inspector for a thorough evaluation of the premises.  Make sure you ALWAYS do your own research on who you use for your inspections, it’s fine that your agent recommends someone (they should recommend at least 3 different ones, or none at all), but do your own due diligence.

A “standard” home inspection fee will depend on the kind of property you’re buying, and can vary depending on your location.  For a condo unit, you’ll only need to pay about $250, but a single-family home might cost up to $500.  Luxury properties are often even more expensive. Always remember, if you are buying a home with pool you’ll need to get that inspected, if your property has a well and/or septic system those need to be inspected too.  The home has a lovely brick fireplace?  That gets it’s own inspection as well.

Depending on the size of the home, how many items need to be inspected, and how many different inspectors need to be involved, the amounts very greatly.

On the low side, your property may only require a “general” home inspection, with none of the earlier mentioned “add-ons”, in that case you could be looking at as low as $300-$400 for all of the inspections necessary to purchase the home (Note: this amount does not include the lender’s appraisal which you also must pay for).

On the high side, if you have that larger home, with the pool, with the fireplace (or multiple fireplaces), a well, a private septic system, maybe even an underground fuel tank, you could be looking as high as $1,500 – $2,000 (or even higher)… so keep the inspections in mind when budgeting.

2.  Private Mortgage Insurance: Required With Small Down Payments

If you’re only planning to make the minimum down payment on your home, then you’ll need to buy mortgage insurance (you don’t have a choice).  Mortgage insurance protects the lender in the event that you default on your loan.  This is an added cost that your lender pays, and in general, almost every lender will pass the cost on to you.

You can pay for your mortgage insurance in one large payment, or you can add it to your monthly mortgage payments.  Note that if your down payment is less than 20% of the purchase price, you’re legally required to buy mortgage insurance.

So make sure your lender goes over all of your options when it comes to Mortgage Insurance.  Many home purchasers kick themselves later when they figure out that because they weren’t informed when they bought their home of all of their options, they set themselves up to waste thousands of dollars in insurance payments throughout the course of the mortgage.

Many home buyers are forced to refinance later just to shed the Mortgage Insurance premium, and that costs even addition money out of pocket (could be thousands).  Some people believe that after they think they have 20% paid equity into the property after a few years of paying the payments… and the mortgage insurance simply “goes away”.  Even though that in many cases this is what should happen, it’s not that simple or cut and dry.  So do your homework on the loan product you choose and how the mortgage insurance will work within it.

3.  Lender Fees: All Sorts Of Charges On Top Of Your Mortgage

One large, “catch-all” category of closing costs that Maryland home buyers often forget is lender fees.  Lender fees are fees that your mortgage lender will charge you in order to recoup their costs, and in some cases assist in turning a profit.  These include appraisal fees, credit report fees, processing and application fees, and administration fees for underwriting.

These fees can range depending on the lender, but in many cases they exceed $3,000. You’ll want to budget about $3,500 to $5,000 to be safe.

Buying a house is a major undertaking, and at ExecuHome Realty we strive to educate all of our clients on all of their options so they can make informed decisions.  There are many moving parts throughout the home buying process, so turn to ExecuHome Realty, “Maryland’s Own Real Estate Company”, to help you navigate the industry and get the home you’ve always wanted without any issues.

Contact Ryan today at 443-513-0122… I can’t wait to help you!