If you’re house shopping, you know that one of the most difficult parts of actually buying a home is submitting a bid for that house. Even if there are no other current bids, bidding too low can result in a rejection and the seller might not be willing to consider another offer from your camp. Here’s how to make sure you are submitting a bid that the seller won’t be able to refuse:
- Know how much you can spend. Before starting to formulate your bid, even with the help of a realtor, know how much home you’re able to afford. The size of your down payment and the total bid will both be factors, so if you’ve been saving up to place a large down payment, this can help offset a bid that has a total lower than the asking price.
- Understand the market. If you’re operating in a seller’s market, you are likely going to have to make more concessions for the seller than if you were in a buyer’s market. In a seller’s market, there are lots of buyers submitting bids on the same house, some of which may be at or above asking price. In a buyer’s market, there are lots of houses for sale and only a few buyers looking. In a seller’s market, offer your very best offer first, be flexible when it comes to closing dates, and be willing to put down a larger initial payment. In a buyer’s market, you can often lowball a seller to open the door for negotiation.
- Get preapproved for a mortgage. While a pre-approval doesn’t 100% guarantee that you will get a mortgage, it is much better than trying to find a mortgage after your offer has already been accepted. Being preapproved shows a seller that you are far more likely to be able to actually buy the house than someone who has not yet looked into getting a mortgage.
- Work with a great real estate agent. The right real estate agent can make all the difference. They know how to work in both a buyer and a seller’s market to get you the house you want at a price you can afford. They’ll also know when to tell you to walk away from a house if the seller is being unreasonable.