How To Make An Offer To Buy Real Estate?

An offer to purchase real estate is always a risk because you agree to sign a sales agreement with the owner. First of all, you must calculate the best possible offer based on the value of the property, and take all necessary precautions to avoid getting stuck. Here are our tips for making an offer to buy under the best conditions.

Carry out its own evaluation of the property

Have you visited the house or apartment of your dreams? It ‘s time to make an offer to buy real estate. But be careful: this offer will have consequences, and for this reason should not be made at random. You have to calculate your offer according to different parameters: your maximum budget, the price proposed by the owner, and market prices at the time you want to buy.

If your offer to purchase is based on the price set by the seller, you can not just rely on it. Sellers tend to overstate their property, often in opposition to the opinion of the professionals they surround themselves with. In fact, you do not have to take the amount you are asked for by the owner and make your own assessment of the property you are targeting.

For a correct assessment, you need to study both the local market, the location of the property and the condition of the property itself.

Local market and location

The first stage of the evaluation: depending on the reputation of the city and the neighborhood in which the property is located, the value of the property can vary from one to two. Start by asking about the state of the local property market to know the average price per square meter. Consider the criteria that will increase or decrease this average price: the residential natural environment of the neighborhood, its calm, proximity to amenities, the presence of green areas and schools, access to public transport, etc.

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By definition, a property, even of high quality, can not be so expensive if it is located in the center of a major conurbation, with all amenities within a 5-minute walk, or in a community of 300 souls. In the middle of the fields, devoid of all commerce.

National newspapers regularly offer grids with the ratings of cities and districts. Do not hesitate to consult them, and ask for the expertise of a professional real estate. If you benefit from the services of a real estate fighter, this one will advise you very precisely on the value of the property and the margin of negotiation that is yours.

The study of the good in itself

The second step is to evaluate the good itself, studying it to the smallest detail. Its rating will go up or down depending on its condition, its qualities, and its weaknesses – in short, taking into account its own characteristics, if it is refurbished, if it requires works and works, It is extended by a terrace or a balcony, if it is on the ground floor or on the last floor with view, etc.

This grid of criteria (not exhaustive and not contractual) will give you an idea of the characteristics to be taken into account and their intrinsic value:

  • A ground floor apartment overlooking the street: from -15 to -25% of the average value
  • An apartment located on floors served by an elevator: + 2.5% per floor from the 3rd floor
  • A terrace, a balcony or a garden: from +5 to +15%
  • An apartment or a house with a view: from +5 to +20%
  • Significant noise pollution: from -15 to -20%
  • Renovated housing: from +15 to +20%
  • A dwelling requiring refreshment work: from -5 to -10%
  • Housing to be renovated almost entirely: from -10 to -30%

Other criteria are the orientation of the dwelling, its sunshine, the result of real estate diagnoses, etc.

Make an offer to purchase in writing

Once you have a good idea of the value of the asset, you can make an offer to buy. This can be done in two ways: oral or written. In your oral version, your offer does not commit you in any way. Whether your proposal is made to the real estate agent or the owner himself, you make an offer that is not engraved in the marble and that does not give you any right if another buyer offers a more attractive offer for the seller.

The alternative is to write an offer to buy a paper. This one engages you with the seller since this one has accepted your offer in writing also. The written purchase offer is, therefore, a legal act and guarantees that your proposal will be followed by the signing of a sales agreement. However, before you take this route, be sure of yourself and ensure that you have organized your financing plan (including prior acceptance of a mortgage ).

What your written purchase offer should contain

This written offer must contain several information:

  • The amount of the property;
  • The type of property: house or apartment, area, number of rooms, etc. ;
  • The duration granted to the seller to accept or refuse, generally between 5 and 10 days;
  • The terms of acceptance or refusal by the seller (by bailiff or by registered mail with acknowledgment of receipt);
  • A withdrawal period, which turns on average around 7 days;
  • Details of your financing plan;
  • The following mentions: final sale only after signature of the pre-contract, and offer of purchase canceled automatically for lack of answer within the deadlines.

Think of adding suspensive clauses!

Let us insist on this point: the written purchase offer commits you. In order not to find you in a situation without a solution, it is strongly recommended to add to the document suspensive clauses – which will or will not be accepted by the seller but will protect you if you encounter a problem.

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You can, for example, add suspensive clauses for denial of the mortgage by your bank; Questioning the condition of the dwelling (you find that the electrical installation does not work, or that the frameworks are eaten by termites); Presence of servitudes hitherto ignored, and whose existence can affect your enjoyment of good; Etc.

Even when you acquire a new home or considered new, you must remain extremely careful and add suspensive clauses to your offer to buy!

Risks and consequences of an offer to purchase

Contrary to popular belief, the paper offer is not an invitation to negotiate. If the seller considers your offer too low in relation to his expectations, he is entitled to make a counter-proposal, always in writing. But if he agrees, you agree to sign a sales agreement.

Please note that no payment can be made at the time you submit your bid. And that the lack of response from the seller, or the formulation of a counter-proposal by him, frees you from your commitment.

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