A home is the biggest purchase you’ll ever make in your life and it can be both exciting and extremely stressful, all at the same time. Sometimes the negotiating process can be long and drawn out, and often, it pushes you out of your comfort zone. Here are some tips for reducing the amount of stress you’ll feel during the home buying process and deciding on whether that’s your final offer.
Your final offer.
- Get a pre-approved mortgage. Once you’ve spoken to your bank and know how much mortgage you qualify for you will know what your final offer can be, then you can set your search criteria to stay within that amount. You won’t find your dream home, only to discover you can’t afford it.
- Understand the market. Talk to your real estate professional about neighborhoods that fit within your budget or ask about your preferred neighborhood and whether or not it’s realistic for you at this particular time. Once you understand the value of the properties on the market and what you can actually get for your money, it will make your search easier to narrow down. Online listings are a great place to start your search, but you’ll probably look at quite a few homes before making a final decision.
- Concentrate on the value of a home. The list price does not always reflect the value of a home. If it’s not priced properly, the best way to figure out its’ true value is to look at comparable properties with your agent and see what those homes are selling for. Depending on the market, the home may sell for more or for less than the list price, but if you know what the comparables are, you’re well-armed for the negotiation process.
- Don’t blow the budget. Negotiations can be difficult and there may be several offers and counter offers before it’s all said and done. Keep calm and don’t offer more than what you can comfortably afford to pay for over the next few years. Even in a tight market, you may be tempted to over-extend yourself in order to secure a home, but think twice about this. If you’ve made your final offer and can’t go any higher because you’ve reached your budget, then maybe this isn’t the home for you after all. There will always be other homes so don’t panic if you don’t get the first one you make an offer on.
With interest rates at extreme lows, it’s tempting to spend more than you should. But think about what would happen if interest rates increase by one or two percent. Ask yourself if the home is still affordable to you then and make your final offer accordingly.