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Four critical things to do before you make an offer

Before you have your agent prepare and submit your offer, there are four critical things that should be considered or steps that should be taken.

The most critical step before moving forward on a home is determining if you will be able to obtain financing. Loan requests can be denied because of the borrower’s qualifications or the acceptability of the property. Most prudent agents will advise you not to make an offer until you are pre-approved; it’s best to check with more than one lender to get the best rate and fully understand all your options.

If you are considering the purchase of a home that needs repairs, is manufactured or in a condominium community, the home may not be acceptable to the lender; you should always check with your lender when contemplating a purchase of these types of homes.

If the home you like is in a subdivision that has a homeowner’s association and/or private covenants, you should review the governing documents before making an offer. Homes in these communities have rules that go beyond the city and county restrictions and requirements. You will have a period of time after the home is under contract to perform a detailed review of the rules and restrictions; however, you should determine if there are obvious concerns or issues before you start the process.

It’s important to note the condition of the home before your agent prepares the offer. Obvious issues like a deteriorating roof, peeling paint, worn floor coverings, cracks, broken windows, etc., should be noted.

If you expect the seller to repair or replace anything that is obvious, you should include the requirement in the initial offer to purchase. Your home inspector will alert you to hidden issues and you can request that the seller rectify them; however, it’s not appropriate to ask the seller to rectify obvious conditions after the purchase contract is signed.

Most homes have an asking price that is at the high-end value range. The final negotiated price depends on a number of factors, such as demand for similar homes; the buyer’s and seller’s motivation; and/or the desirability of the home. Your agent should prepare a list of similar homes that have sold over the past year and provide their opinion on value range of the home. You can then instruct your agent to negotiate accordingly.

Be very wary if your agent suggests a full-price offer unless there are other buyers making an offer or they can demonstrate that the asking price is in the middle or low end of the value range.

Completing or paying attention to these four critical steps before making an offer will make the home-buying process more pleasant, eliminate wasted time and result in you getting the home you want at an acceptable price and condition.

Steve Setka is an exclusive buyer’s agent with Keller Williams Realty in Durango and a licensed mortgage originator. He can be reached at 903-7782 or Steve@DurangoRE.net.

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