Now that we have gone through this process a few times, I have realized that making an offer as a first time home buyer can be broken down into four stages:
Stage One: This is The One: we will grow old in this house.
Four times now my husband and I have called our friends and family, excited because we found a house in Colorado that we love! This is our third time that we have been ready to make an offer. The second time that we’ll actually sign the paperwork. But, I really mean it this time. I’ll be crushed if we don’t get this house.
Stage Two: “Every House Has Room For Upgrades” (Justifying the yellow carpet and the Harvest Gold appliances)
Suddenly I imagine spending all of our money on “upgrades” to our new home. We love this house because the upgrades needed are “cosmetic only.” It’s really nice to know that in this house we will have the option to spend our money on laminate floors or vacation. Not, repair the caved in basement versus vacation. If you’re basement is caving in you can pretty much say good bye to the vacation. We made the decision to buy a house with no signs of movement in exchange for… I hesitate to use the word “terrifying” and will settle on “throwback”… bright yellow and brown patterned carpet.
Stage Three: I’m not at the $5 table any more. (Deciding our offer price.)
For those of you who have never made an offer before, here is what the experience was like for me. Our buyer’s agent analyzed about 5 or 6 comparables. This is a word I had never used before. Comparables are basically houses that are similar, so that you have a good idea about the value of the house you are about to buy. Your buyer’s agent will make “adjustments” because it is unlikely that there will be another house EXACTLY like yours. For example, adjustments to the sale price need to be made if the comparable house has hardwood floors, and your house has the original 1968 carpet. (grin). After you have seen a few comparables, you can get a good idea for what the house is “worth.” Then, you can determine a number for your offer.
Stage Four: When I sign this document my life is going to change. (Signing The Contract)
If you haven’t read the contract before, you really should. I wish John Grisham would write a new book called “The Contract.” Our buyer agent went over it with us, line by line. The whole thing is about 12 pages long. We decided on things like the closing date, acceptance date, concessions, and so on. I am really glad that our agent spent a few hours going over everything with us. There is a surprising amount of strategy involved, plus the legal jargon to wade through.
Stage Five: Wait.
All you can do now is hope you played your cards right, and harass your agent to see if he’s heard anything.