How to make a compelling offer as a first-time homebuyer

Making an offer on a home is both exciting and nerve-wracking—especially if you’re a first-time homebuyer. In a competitive housing market, it’s important to craft a compelling offer that gets noticed by the seller, while also ensuring you’re making a smart financial decision.In this blog, we’ll walk you through how to make an offer that stands out, saves you money, and gets accepted by the seller.

Step 1: Do Your Homework (Understand Market Value)

Before you make an offer, it’s essential to understand the fair market value of the home you’re interested in. Research comparable sales (comps) in the area—these are recently sold homes with similar features, size, and location. If you're working with an agent, ask them for help in pulling a Comparative Market Analysis (CMA) on the homes you're interested in. 

Tips for First-Time Buyers:

• Look for Homes that Sold Below Asking Price: Identify patterns in your market to see how often homes sell below list price.
• Consider Days on Market (DOM): Homes that have been on the market for more than 30 days are more likely to accept offers below asking price.
• Check the Condition of the Home: If the property needs repairs or updates, use that as leverage to negotiate a lower price.

Step 2: Get Pre-Approved for Financing (or Use a Cash Offer Partner)

A pre-approval letter shows sellers that you’re serious and financially capable of closing the deal. If you’re working with a fractional ownership partner like Ownify, you can make strong cash offers, which sellers prefer due to their speed and certainty.

Why a Cash Offer is Compelling:

• Speed to Close: Cash offers can close in as little as 10-15 days, compared to 30-45 days for mortgage-financed offers.
• Certainty: Cash offers are less likely to fall through due to financing issues, making them more attractive to sellers. A conservative estimate by NAR is that 5% of all deals fall through after offers are accepted. 

Step 3: Offer a Competitive Price (But Not Too High)

Your offer price should reflect both market conditions and the home’s value. While it’s tempting to bid aggressively to secure the property, overpaying could hurt your long-term financial goals. Getting a smart bidding strategy in place is one of the hardest parts as it's easy for emotions to take over. Keep in mind that at this point, your agent's incentives and yours are not aligned. Buyer's agents often counsel towards higher offers as their incentive is to get the deal done as quickly as possible. So it's on you (or Ownify if you're working with us) to push for a smart offer. 

Tips for First-Time Buyers:

• Start with a Fair Offer: In most cases, starting with an offer that’s 95-98% of the asking price is reasonable.
• Know When to Negotiate: If the home needs repairs or has been on the market for a while, don’t be afraid to offer below asking price.
• Keep in mind that the seller doesn't know the value of their home but may have a number in mind. Having a justification for your offer price - especially when your offer is below the asking price - may help.

Pro Tip: If you’re working with Ownify, your buyer’s agent has a unique incentive to negotiate the best price for you. They earn a bonus based on how much they save you, which isn’t the case with traditional agents.

Step 4: Sweeten the Deal with Terms and Contingencies

The price isn’t the only thing sellers care about. Offer terms and contingencies can make or break a deal. The fewer contingencies you include, the more attractive your offer becomes.

Key Terms to Consider:

• Inspection Contingency: It’s essential to protect yourself by including an inspection contingency, but keep the timeline short (e.g., 5-7 days).
• Appraisal Contingency: If you’re making a cash offer, you may not need an appraisal contingency. This can make your offer more attractive to the seller.
• Flexible Closing Date: Ask the seller about their preferred closing timeline and offer flexibility if possible.
  
  

Step 5: Increase Your Earnest Money or Due Diligence Deposit

The earnest money deposit (EMD) is a good-faith payment that shows the seller you’re serious about the purchase. While typical EMDs range from 1-3% of the purchase price, increasing your deposit to 5% or more can make your offer more compelling.

Why This Works:

• A higher deposit signals to the seller that you’re serious and financially capable.
• It also shows that you’re less likely to back out of the deal.

Pro Tip: With Ownify, the higher earnest money deposit is supported by a cash offer, which boosts seller confidence.

Step 6: Write a Personal Offer Letter (Optional)

A personal offer letter can sometimes make a difference, especially for sellers who have an emotional attachment to their home. It’s a way to humanize your offer and stand out from the crowd.

What to Include in Your Offer Letter:

• Introduce Yourself: Share a bit about who you are and why you love the home.
• Mention Your Plans: Let the seller know how you’ll take care of the property and contribute to the community.
• Express Gratitude: Thank the seller for considering your offer.

Step 7: Work with an Experienced Buyer’s Agent

Having a buyer’s agent who knows how to negotiate is crucial. With Ownify, buyer’s agents are incentivized to secure lower purchase prices, thanks to the 2+10 commission plan.

Why This Matters:

• Traditional agents prioritize closing deals quickly, often at market-clearing prices.
• Ownify’s agents earn 10% of any price reduction they negotiate, ensuring they’re motivated to fight for a better deal on your behalf.

Step 8: Be Ready to Move Quickly

In competitive markets, timing is everything. Be prepared to submit your offer quickly after viewing a home you like. Sellers appreciate buyers who are organized and decisive.

Tips to Move Fast:

• Have your pre-approval or proof of funds ready.
• Be available for quick communication with your agent.
• Ensure your earnest money deposit is ready to go.
• If you're working with Ownify, ensure that you have submitted your 2% down payment.
  
  

Step 9: Negotiate After the Inspection

Even if your initial offer is accepted, the inspection period gives you another opportunity to negotiate. Use any findings from the inspection to request repairs or a price reduction.

How to Negotiate Post-Inspection:

• Focus on safety and structural issues rather than cosmetic problems.
• Get repair quotes to justify your requests.
• Be reasonable—sellers are more likely to negotiate if your requests are fair.
  
  

Final Thoughts: Making a Winning Offer as a First-Time Buyer

Making a compelling offer is about more than just the price—it’s about offering certainty, flexibility, and confidence to the seller. By leveraging tools like Ownify’s cash offer model, working with a motivated buyer’s agent, and sweetening your terms, you can secure your dream home at a better price.

Remember, first-time buyers have a unique advantage in partnering with Ownify. You can compete like a cash buyer and save thousands on your first home purchase.

Ready to Own Smarter?

Ownify is here to help you every step of the way. Let’s make your dream home a reality—with a smarter, more affordable offer strategy.