Step 6: Find a Home and Make An Offer

Once you've been pre-approved for a home loan; the fun begins - finding the home for you! You may want to work with a professional real estate agent to help you sort through the many home listings, provide insight into neighborhoods, and help you focus on those properties that suit your needs.

Take some time to choose the right agent. You'll be working with this person closely on one of the biggest purchases of your life, so you'll want someone you can trust to handle the details. Here are some tips to finding the names of agents to consider:

• Ask friends or people at work for the names of real estate agents who helped them purchase a home
• Scout neighborhoods where you'd like to live, and note the agents' names on any real estate signs. These agents are likely to know a lot about the area's schools, shopping, and access to transportation
  

Interview agents to give you an idea of their working style and how well they listen to your needs. Following are some questions you should ask:

• Are you a buyers' agent, a sellers' agent, or a dual agent?
• Do you have an active real estate license in good standing?
• Do you belong to the Multiple Listing Service (MLS) or a reliable online home buyer's search service?
• How many homes have you helped clients buy in the last six months?
• Can I call some of your clients to ask about their experience with you?
  

You should check the information your agent provides. Check the status of an agent's license by contacting the business licensing department of your state government. You can also contact the local association of realtors. For more information on real estate agents see the Related Articles. [Link to Step 6 Related Articles]

You've Found a Home. What's Next?
When you find the home you want, you must make an offer in writing. Most real estate agents use a pre-printed contract with blanks to enter information about the property and your offering price. You should review the contract and make any changes you feel necessary. (The seller will have to agree to the changes for them to become part of the contract.) In this section you'll review the key points involved in making the offer: the offering price and contingencies.

The Offering Price
Sellers know that buyers want to bargain on the price and may set the selling price a bit higher to give themselves negotiating room. So how much should you offer? In a seller's market (lots of buyers, few homes) you may have to make a full-price offer. In a buyer's market (lots of homes, few buyers) you can probably offer a lower amount. Your agent can provide a list of what similar homes in the area have sold for as a guide. Your goal is to make a reasonable offer, based on market conditions and the condition of the property. The seller has the right to reject your offer or to make a counteroffer. You can then make a counteroffer or walk away from the deal.

Although price is a big factor, many sellers look at what is called the whole package. The items in that package help sellers determine which buyers are in the best position to buy the house and successfully close on the loan in a timely manner. That package includes the following items:

• The amount of your earnest money deposit
• Your ability to complete the purchase within a certain time frame
• Whether you pre-approved for a loan (Here's where having a pre-approval letter makes you more attractive to a seller than someone who does not.)
• Contract contingencies
  

Contingencies
A contingency is a way of saying "I will complete this contract only if other things are completed first." Here are two examples of contingencies:

• Your contract states that you must sell a current home before purchasing another home
• Your contract requires an inspection report that shows no major problems with the home
  

In general avoid adding contingencies unless absolutely necessary, as they can make your offer less attractive to the seller. But some contingencies, such as a home inspection, are necessary, because you may not be able to tell the condition of the plumbing, the heating and cooling systems, the roof, or the foundation just by looking at the house. After all parties sign the contract, arrange and pay for a licensed professional inspector to examine the home. (Your real estate agent can help you with this step.) If possible, tour the home with the inspector; you will learn a lot about how homes should be built and maintained. You will get a report pointing out any problems. Then it's up to you and the seller to decide whether the seller will pay for any repairs or lower the sales price, with you taking the house "as is."

Step 6 Related Articles

• Types of Real Estate Agents
• The Contract with Your Real Estate Agent