How to Make an Offer on Your First Home: Negotiate a Contract that Works for You!

Huzzah! You've done it! You have found your dream home and are ready to make an offer. Although there are several important pieces to completing this process successfully, no one way is "the right way". Purchase contracts differ throughout the nation and vary in length and terms. Negotiating is a give and take event that begins with the initial offer. A good offer is the first stepping-stone to a successful deal.

Your initial offer is expected to be lower than the asking price. A good offer contains several key points.

· Your offer must make sense and be realistic. If you had a dream last night that you got the house for $30,000 that's not a good enough reason to use that as your initial offer. It must be based on comparable homes in the area selling within the last six months. Make your comparisons based on homes of the same size, condition and location. It isn't accurate to compare a home that sold in the same neighborhood but was two bedrooms shy or thirty years older.

· Make sure your loan and financing terms are realistic and up to date. An offer can easily be turned down because the buyers mortgage interest rate, origination fees and more were not based on current lending conditions. Make sure that you have allowed for a reasonable amount of time to obtain financing.

· A good idea in any offer is to include clauses to allow for continued negotiation in the event of problems. Something is bound to come up. If not, you'll be the only person in the world who had a absolutely flawless home buying experience. Neither you nor the seller will be aware of any property defects. Use a property inspection clause so that price negotiations can reopen in the event of corrective work.

The seller can then agree to the price and terms you've offered and sign the agreement. You then have what is called a ratified offer. The sale is pending on your new home. Congratulations! Your own your way to home ownership!

The Offer Contract