How to Make a Competitive Offer on a Home

In order to land the home of your dreams, it’s important you understand how to make a viable offer. This is especially important in a competitive market like the seller’s market we are currently in. Here are some tips for making a competitive offer on a home.

Get Pre-Qualified

Getting pre-qualified is one of the most powerful things you can do when it comes to showing a seller you are serious. A pre-qualification estimates how much you can afford to borrow from a lender which helps you better explore loan options and narrow your home search down to a realistic price range. Being pre-qualified for a mortgage signals to a seller that you have consulted with a lender and are confident that you will be able to secure funding.

Offer Earnest Money

Earnest money, or a good faith deposit, is put down prior to closing with the purpose of showing a seller that you’re serious about buying. In some cases it is required but even if it isn’t, putting it down anyway may help make your offer more competitive. Earnest money basically protects the seller in case the buyer backs out of the sale. The value varies but is typically somewhere around 1% to 3% of the home price and is typically kept in escrow until closing. If the deal goes through as planned, the earnest money goes towards the price of the home. The seller usually gets to keep the earnest money if the buyer breaks the terms of the purchase agreement. This is to say there is some risk for a buyer in putting down earnest money, but the risk is very minimal if you are truly serious about buying the home.

Be Smart with Contingencies

Contingencies are things that must happen before the home sale is able to move forward. Some common contingencies include ones regarding financing, appraisal, inspection, and home sale. Buyer contingencies are put in place to protect your interests but may also act as a barrier to making a deal; the more buyer contingencies there are, the more risk there is of the sale ultimately falling through for the seller, so having too many contingencies may make your offer less desirable—especially in a competitive market. If a contingency is in your best interest, by all means include it, but try sticking only to contingencies that are truly necessary.

Establish a Rapport with the Seller

When a seller is flooded with financially comparable offers, sometimes the choice comes down to emotion. Think about including a letter to the seller to go along with your offer. Your real estate agent may be able to share some background about the seller with you so you can establish common ground. Tell them a bit about yourself and explain what you love about their home and neighborhood. If you’ve made a strong offer financially, this level of personalization may very well be the defining factor that will allow you to stand out among the rest.

Are you ready to get serious about homebuying? Consult one of our qualified Loan Officers today to explore your mortgage options!

Buying a Home with Student Debt

With graduations upon us, graduates past and present are reminded of the price of their education. According to the U.S. Federal Reserve, in 2021 44.7 million Americans have student loan debt and in Maryland, the average balance is $36,689. Many potential homebuyers think with a mound of student debt it will be nearly impossible to purchase a new home. Luckily, there are options for those with debt to buy homes. The Maryland Mortgage Program offers the SmartBuy 3.0 program, which helps to qualify homebuyers to pay off student debt during the purchase of their home.

The terms are simple.

You must have minimum existing student debt of $1,000 and the loan must be in your name. The program offers up to 15% of the home purchase price with a maximum of $30,000 in financing to be used towards paying off your debt. The full, outstanding balance of the student loan must be paid off as part of closing; partial loan payment is not permitted. The student loan may be in repayment or deferred status.

Financing for student loan relief will be in the form of a 0% interest, deferred loan with no monthly payments. The loan is forgivable over 5 years; this means if you live in your home for 5 years, your debt is forgiven, and repayment is not needed! If you choose to sell or refinance the property within 5 years, the remainder of the student debt loan will be due upon the sale of your home.

This is a great program to utilize if you are a first-time homebuyer and have accrued student loans over the past few years. Contact one of our loan officers today to see if you qualify!

*Student debt information pulled from Student Loan Hero:

Tips to Boost Your Home’s Curb Appeal

Everyone wants to put their best foot forward when it comes to the first impression others have of their home. Curb appeal is important not only to your guests and neighbors, but it can also have a major impact on potential homebuyers’ initial feelings about your property. Most homeowners are so used to looking at their yards every single day, that they can easily overlook areas that need improvement or potential focal points that could really add a wow factor. Read on for tips to properly assess your space and boost that curb appeal to make your home shine!

Experts suggest taking photos of all angles of your yard and analyzing them as if you were an expert – and a stranger! Taking a step back to critically review your property can allow you to see things you might otherwise miss. Take stock of your neighbors’ yards as well – what you like and dislike about the general level of maintenance quality. Aim to be at least on par with the other homes nearby, or ideally, to transform your front façade into the best on the block!

Plants that Pop

A gorgeous front garden is a sure-fire way to get the right kind of attention for your home. Flowers in bright colors that compliment the color of your house are the most affordable way to make a big impact. Consider a mix of annuals and low-maintenance perennials, and include some evergreen pieces to carry your garden beds through the fall and winter.

Polished Paint

Chipped paint is not just an eyesore, it can raise questions about the level of care your entire home receives and put doubt in the minds of potential home buyers. Be sure to touch up any damaged paint. Has your paint color gone out of style or faded? A fresh, popular color can brighten up the whole look of your home. Changing the color of your front door and shutters are the easiest and quickest fixes. If you have a Homeowner’s Association, be sure and check that any new colors you choose are allowed.

Entry Focal Point

A clear designated front entry is key to the success of your curb appeal. If there is any confusion about which entry is at the front, an easy-to-see and follow path will help visitors find the way. Dress up the front porch with potted plants, easy-to-read house numbers, and other decorations. Accessorize the front door with a seasonal wreath and add an elegant porch light.

Address Eyesores

Some items are essential to modern homes, without being particularly attractive to look at. If a utility meter or AC unit is stealing center stage in your front or side yard, consider ways to screen them from view. Plants, trellises, and easy to install decorative panels are all great options with aesthetic appeal.

Trim and Tidy

Maintenance is a major factor in the curb appeal of any home. Clear away clutter and find an attractive storage solution for it in your backyard if possible. Keep your lawn, shrubs, and trees properly edged and trimmed, and your flower beds weeded and mulched. Rake up leaves in the Fall and water your grass and plants when appropriate in Spring and Summer. Clean and power wash surfaces when appropriate to keep everything looking its best. Your hard work will pay off and your home will impress!

Landscape Lighting

Finally, consider your home’s curb appeal after hours. Landscape lighting can beautifully accent your walkways, entryway, and garden in the twilight and evening – times when many house hunters schedule showings since it’s outside of regular business hours and they’re free to go and take a tour! From spotlights on a statement tree to simple solar lights lining a flower bed, to string lights accenting a beautiful porch railing, the options for outdoor lighting are almost limitless, and fun to explore.

These simple tips will help you bring out the absolute best in your home and wow visitors and neighbors alike. It is also a wonderful feeling coming home to your own gorgeous front yard! Since you took before pictures to assess your needs at the start of the project, be sure to take after photos too so can compare and enjoy!

Are you getting ready to put your home on the market, or considering a refinance to help afford home upgrades? One of our experienced loan officers would love to help! Contact us today!

Buying a Home in a Seller’s Market

We are in the midst of a booming seller’s market. In real estate, a seller’s market occurs when the demand for homes is greater than the supply. This is the inverse of what happens in a buyer’s market, which is when there is plenty of supply but not as much demand for houses. As the name suggests, a seller’s market is great for sellers but can be difficult to navigate as a buyer. Here are some tips for buying a home in a seller’s market.

Get Prequalified

Getting prequalified for a mortgage is incredibly important in showing sellers you are serious about buying. Prequalification is an estimate of how much you can afford to borrow from a lender, allowing you to explore specific loan options fitting your financial situation. Knowing that you have talked to a lender and been prequalified shows a seller that you will actually be able to secure a mortgage and therefore are serious about your interest and offer. Prequalification also helps you in your home search as it allows you to set a realistic budget so you don’t waste time going after homes that cost more than you’re able to afford.

Work with a Knowledgeable Real Estate Agent

You always want to work with a savvy agent when buying a home, but it’s especially important when searching in a seller’s market. You need to choose someone who is fast to communicate both with you and on your behalf to others. It’s also in your best interest to choose someone who has knowledge about and experience in the neighborhoods you’re looking to buy in. In some cases, your agent can even offer insight into upcoming inventory which can give you an edge in securing a home as soon as it hits the market.

Stick to a Budget

When a bidding war starts—which is likely in a seller’s market—it can be easy to get carried away. When starting your home search, set a strict limit on how much you’re willing and able to spend on a home. Exceeding your price limit may get you into the home you want, but it can (and often will) cause financial stress and hardship in the future, so it’s important to consider the ramifications of going outside your budget. Look at the bigger picture, like how much the home is actually worth and what kind of payments you can truly afford.

Give Your Best Offer

A seller’s market is not the time to go in with lowball offers. It is common in a seller’s market to see homes go for above asking, sometimes considerably so. Work with your agent to determine what a strong, realistic offer is going to look like for a given property. Be prepared for bidding wars to break out.

Temper Your Expectations

When inventory is limited as it is in a seller’s market, the “perfect” home may not come on the market when you’re looking—and even if it does, there’s no guarantee you’ll be the one to buy it. As the saying goes, beggars can’t be choosers, and in a seller’s market, you can’t be too choosy. This isn’t to say you should sacrifice your list of must-haves, but make exceptions to things that can be changed. For example, you can always add on or renovate in the future, but you can’t change the home’s lot size or location. It’s also not the best time to ask for add-ons in your offer, like inclusions or requesting updates be made. In a seller’s market, the seller has the power, so buyers should seek to be as flexible as possible.

Personalize Your Offer

In a seller’s market, sellers are often faced with multiple offers at once. Sometimes, it’s the little things that can make a difference. Consider writing a letter to the seller to go with your offer. Share a little about yourself and explain what you love about the home. This is your chance to appeal to their emotions, not their bank account. Keep it short and sweet and be sure to say thank you. If your offer is one of two comparable bids, this level of added personalization may make yours stand out to a seller.

Are you ready to take on the challenge of buying in a seller’s market? Talk to one of our experienced Loan Officers today to learn more about your mortgage options!

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