How to Make an Offer on a House as a beginner

You have surveyed the most beautiful houses in your desired neighbourhood for weeks. Finally, you spotted one, and can’t wait to occupy it with your family.
You’re elated, but suddenly, it dawned on you have never made an offer on a house before?
Anxious? Well, it’s natural for you to be. There’s absolutely nothing for you to worry about because the process is easy when you know what to do.
That’s why, in this blog, I’ll take you through the step-by-step process of how to make an offer on a house as a beginner in Accra.

How to make an offer on a house as a beginner.

• Get your Finance Pre-approved

Even before you start looking for a house to buy in Accra, make sure you have enough money estimated to buy your desired house. Then get your pre-approved letter ready. This means you’ll have to provide some basic income and credit information.

Getting your pre-approved makes the transaction easier between you and the agent as it limits time-wasting. Also, most real estate agents will pay more attention to you once you have your pre-approved letter.

If you’re buying with a mortgage, clarify you have a mortgage you’re buying with a mortgage and ensure you have enough cash for a deposit.

Since you’re a first-time buyer or otherwise chain-free, make sure to communicate that as well. You also need to provide your estimated price for the house, which will be reviewed by the real estate agent.

• Talk to the agent for a first viewing

Once your documents are ready, it’s okay to talk to the agents to see the house. During this process, make sure you ask all the relevant questions to be sure you’re making the right decision on a house. Ask about how long the house has been on sale or how old it is. You can also find out how long the seller has occupied the house and how quickly they’re willing to move out.

Real Estate Agents at Prophunt are one of the top best agents in Ghana to take you through your real estate needs. They will answer all your questions as you explore the best properties to buy, sell or rent in Ghana.

• Research similar properties

Thirdly, research similar properties in the area to compare prices, structure and every other information necessary. Make sure to evaluate current listings and their prices as against past listing of similar properties and their price to help you bid.

You can find a lot about a home in its listing and public property records. On the website of Prophunt is numerous property listing you can explore.

You should also research for general information in the neighbourhood. Find out if schools are closer to the house,  in case you have school-going kids. How affordable are the schools? How far is the supermarket or grocery store?

Make sure you have all information to make a satisfying decision.

• Book a second viewing

Once you have all the information you need and you’re sure about the property, call the real estate agent for a second viewing. This makes it possible to catch up on any other information or insight you may have missed during the first viewing. This new information also opens up conversations during negotiation so as to justify why you’re making a specific offer.
For example, if you find out from your second viewing that there are some plumbing issues, you may make an offer a few percentages lower than the actual price and justify your decision with the information.
You should however know that Prophunt lists only real estate agents that are verified, excellent and in good standing.

• Make your offer

At this point, ensure you stick to your budget. Put together a detailed budget using your take-home income and all monthly expenses. This will make it simple to determine how much you want to offer for the house.

The strategy here is to offer your best price first so show the agent you’re serious about the house.  Contrarily, you can make a lower offer subject to negotiations. However, make sure your lower offer is not too low, as it can appear insulting to the agent or seller. The goal is to be realistic in your offer.

You can also decide to delay making an offer if there’s less competition on the house listed. This can make the seller desperate and eventually accept a low but fairly offer.

Nevertheless, it’s best to make your offer quickly. In situations where the competition is strong, you can make an offer above the asking price to put you ahead. Make sure though, that you’re financially up for it.

Make things easy for the seller by communicating or negotiating a settlement date to plan accordingly.

• Decide Your Ernest Money offer

An earnest money deposit is an amount of up-front cash you put into the transaction that you forfeit to the seller if you back out of the deal for one or more reasons.

This money comes from your down payment funds, so it’s not extra cash you need to save.

Earnest money deposits can vary but are typically in the 1 to 2 per cent range. This can help your offer stand out from others and will show the real estate agent in Ghana or seller you’re serious.

• Remember your Contingencies

Contingencies are clauses you put in your contract offer to protect yourself. They allow you to back out of the transaction without losing your earnest money deposit or facing legal issues.

The five types of contingencies to consider are:

• Home inspection: You’ll want to get a home inspection performed on the property before closing. This contingency allows you to renegotiate or back out of the deal entirely if it reveals serious issues.
• Appraisal: This contingency allows you to renegotiate or exit the transaction if the home’s appraised value is less than what you’ve offered.
• Financing: This contingency lets you back out if your mortgage loan falls through.
• Home sale: This one is for buyers who are also selling their current property. It says that you agree to buy the seller’s house, but not until your existing home sells.
• Title: Under this contingency, you can leave the deal if there are issues with the property’s title.
• Be aware of gazumping

Gazumping explains a situation when an offer has been accepted, but then the agent or seller decides to accept a higher offer from a different buyer.

Although it’s perfectly legal, it does not work in favour of the buyer because they have to decide whether to offer more or accept that they’ve lost the property.

Since there’s no sure way to maintain the sale, or avoid gazumping, the best practice is to ask the seller to take the property off the market once they accept your offer, exchange contracts quickly and maintain a good relationship with the seller so they’re less motivated to welcome a gazumper with open arms. 

• Finalize and sign the contract

When everything is settled, it’s time to write your offer. If you’re using an agent of your own, you can decide to let him/her write the offer.

There is some information which should be visible in your contract offers such as the name of the seller, the address of the property, the names of anyone who will be on the title, including yourself, and the purchase price you’re offering and down payment.

Also, include a complete list of fees and closing costs and a deadline to respond to the offer. After you’ve submitted your offer, the seller or real estate agent can either accept it, reject it, or make a counteroffer.

Once you and the seller agree, you’ll then sign the contract.

Then you’ll send this contract to your mortgage lender to continue the mortgage process where your pre-approval left off. The house will then be inspected. 

The bottom line

How to make an offer on a house as a beginner, is an easier process when you have all the knowledge required to approach an agent or a seller. However, note that it isn’t as simple as asking for a discount in your favourite supermarket.

The more knowledge and preparation the better. Here’s a recap;

1. Get your Finance Pre-approved

2. Talk to the agent for a first viewing

3. Research similar properties

4. Book a second viewing

5. Make your offer

6. Decide Your Ernest Money offer

7. Remember your Contingencies

8. Be aware of gazumping

9. Finalize and sign the contract

Remember, you can always contact Prophunt for all your real estate needs in Ghana.