While searching for a home online, John and Jennifer Anderson come across one that meets all of their requirements except for the price. The seller is asking $799,000 and the Andersons' maximum budget is $700,000.

After examining the virtual tour several times, John says to Jennifer:

"Don't you think this home is perfect for us?"

"It is... but the price is almost $100,000 more than our budget," Jennifer replies.

"Ah, that's just the asking price. Because the real estate market is so depressed, the seller may be willing to accept $700,000. So let's see it this Saturday," John comments.

Jennifer agrees and John contacts the agent, Glen, to arrange for a showing.

After the inspection on Saturday, both Jennifer and John are ecstatic because they feel the house is perfect for them. They tell Glen they will let him know on Sunday whether they want to make an offer.

That evening, the Andersons talk enthusiastically about the house and how wonderful it would be to live there for the rest of their lives. But when they begin discussing how much to offer, their excitement dims because they know the difference between what they can afford and what the seller wants is a whopping $99,000.

"How much do you think we should offer," John asks Jennifer.

"Our maximum budget is $700,000, so we can't offer more than this amount," she replies.

"Yeah! But I'm afraid if we offer this amount, the seller may get offended," he states.

"I know. I would be if I were the seller," Jennifer agrees.

The Andersons look at each other intensely and, after a few moments, John suggests to his wife:

"You know what? This house has been on the market for 11 months and the price has already been reduced by $20,000 once. Maybe they're in a more desperate situation now that they may accept $700,000. Let's just put in an offer and see what happens."

"And since we can buy the house without any other subjects and we can close quickly, perhaps the sellers will accept our price. Besides, we have nothing to lose if they turn down our offer. Please call Glen," Jennifer replies in a hopeful tone.

When John tells Glen the offer price, Glen is shocked. But since he's the seller's agent, Glen is obligated to present all offers to them. He says to John, "I'll write up the offer and fax it to you. After you sign it, please fax it back to me. I'll talk to my client tomorrow morning and will let you know their decision as soon as possible."

That night, while lying in bed, the Andersons talk about their potential dream home and the various improvement projects they can do over the next few years. Before falling asleep, they both pray the sellers will accept their offer of $700,000.

The next day, Glen phones John to let him know that although the sellers were stunned by their low-ball price of $700,000, they weren't offended by it. So they made a counter offer for $776,000.

After receiving the counter offer by fax from Glen, John calls his wife to tell her the bad news.

"I had a feeling the sellers weren't going to accept our offer when I left home this morning. That house is perfect for us. If we could afford $776,000, I would buy it immediately. I called our loan officer this morning to find out whether she would give us an $800,000 mortgage and she said $700,000 is the maximum amount based on our current incomes and debt ratios," Jennifer says with disappointment.

"I really love that house. Maybe we can counter their counter offer with $750,000. This is only $50,000 more than our budget. I'm sure we can borrow that amount from my parents or your parents if the sellers accept our new offer," John suggests.

"Well, although I love the house as much as you do, maybe even more because of the fabulous kitchen, I'm afraid borrowing 50 grand from our parents is not feasible," Jennifer states.

After thinking for a few moments, John says in a low tone, "You're right, honey. We can't borrow that much money from our parents. They need it for their retirements. I'll tell Glen we can't accept the counter offer because our maximum mortgage is $700,000. I'll also explain our situation to him and, perhaps if he mentions it to the sellers, they may accept our original price."

"I sure hope so. I'll keep my fingers crossed," Jennifer utters.

The next day, Glen informs John that while the sellers understand their circumstances, they can't accept anything less than $776,000.

The Andersons are saddened by this news and feel they have lost their dream home. Jennifer then says to her husband, "I wish we didn't look at the house when we knew our maximum offer was $99,000 less than the asking price. The last several days have been so emotional for us. I couldn't sleep well last night."

John murmurs, "Me too."

While this example is fictitious, if the Andersons had found out whether the sellers would accept their offer of $700,000 before checking out the house in person, they would have avoided the emotional roller coaster. The amount of time and effort they put into this house could be used to find a home they can actually afford.

What the Andersons should have done was, before setting up an appointment to see the house physically, made an offer for $700,000 with the "subject to a physical inspection to the buyer's satisfaction". The sellers' agent, Glen, would have let them know this price was unacceptable and presented a counter offer of $776,000. When the Andersons found out the new price was still too much for them, they would have searched for another home that was within their price range, avoiding getting emotionally attached to the house and experiencing a lot of stress.

If you're like most buyers, all the offers you made on the homes you have bought were done only after at least one physical inspection. So the idea of submitting an offer before viewing the house in person can seem strange or even make you feel uncomfortable.

If so, please understand this new and more efficient method of purchasing real estate is getting more popular each year, especially for those who buy properties from another city, state, province, or country.

When you make an offer with "subject to a physical inspection to the buyer's satisfaction", if the seller accepts it, it doesn't mean you're obligated to buy the house after you see it. After your personal visit, if you don't think it's suitable for you, just tell the seller or their agent and you walk away without any consequences.

If you want to buy the house after your physical inspection, the process will be quicker because you and the seller have already agreed on the price. This will save an enormous amount of time for you, the seller, and the agent. Everybody wins!

So make an offer on each property you're looking at and include "Subject to a physical inspection to my satisfaction" in your offer. And, if you want to add another clause, such as "Subject to bank financing of $600,000 at 5.25%" or "Subject to a professional appraisal," state it on the offer.

Please keep in mind, the more subjects you have, the less enticing your offer is to the seller. Your offer will have the greatest chance of being accepted if it has a competitive price, a reasonable closing date, and with only the subject to a physical inspection.

Also, remember: if the real estate market in your area is hot, some sellers may not consider your offer because they're getting offers without any subjects from the buyers who have already looked at the house in person. But by finding out whether the seller would accept your maximum price before visiting the property in person, you can avoid getting into the same predicament as the Andersons'.

In short, regardless of the real estate market condition in your city right now, after seeing the virtual tours of the properties you think may be suitable for you on our site, submit an offer for each one. If the seller turns it down, so what?

You have nothing to lose. In fact, you'll save time and money by not having to drive to the properties with prices that are out of your range. You'll avoid experiencing the emotional roller coaster that the Andersons had to go through.

Also, many sellers like to receive offers from you before you come for a physical inspection. If you and they can't agree on a price (or terms) in advance, they won't have to spend hours cleaning and preparing their home for your visit.

If you're selling a house right now, wouldn't you want to get offers from all your potential buyers before they knock on your door?

We rest our case.