How to Bid on Real Estate

Although many first time home buyers may be under the impression that finding the ideal home is the hardest part of the home buying process, more experienced buyers will tell you that in fact, it is the proposal aspect of the purchase that takes the most time. Making your offer is an important aspect and one that you should approach with care. Since your agent may not want to suggest a price for you to offer, it falls on you to do your homework and make a sound offer.

A reasonable bid may not be as simple to come up with as you might imagine. It is essential to find out a few things about the property first. One practical step is to find out why the seller wants the property sold. Although you may not be able to find out this information, it could be helpful during negotiations. The selling agent is the individual that has this information.

The next area of research is your individual local real estate market. You need to know if the market favors buyers or sellers. If you are in a buyer’s market, there won’t be as much competition over the home you want. In other words, there may not be other bids out there on the home. If it is a seller’s market, the owner of the property may be far less likely to negotiate with you. The owner may not accept your offer because there may be several other interested parties.

The next thing you need to look at is the price of properties that are like the one you want. You want to look at properties that have sold in the last few months (don’t go older than six months) and compare the selling price. Find properties that are close to the one you want and that have similar features, sizes, and so on. This should give you a really good handle on what properties are going for in your area.

Also, look into the standard cost per square foot. While this isn’t an effective way to come up with a reasonable price, it is useful to know the trends to ascertain whether such averages are rising or dropping.





In addition, it is helpful to know the seller’s mortgage balance. If the prior residents have already moved out and this value is high, then they may be more anxious to sell and, therefore, more willing to bargain with you. If this value is low, then they may hold out for a buyer who is willing to pay the list price.

After implementing the strategies mentioned above, make an offer. Your seller will more than likely make some type of counter offer. It is very characteristic for a seller to make a counter offer and not accept the first bid. Although your agents usually handle this negotiation process, it is in your best interests to stay on top of the process and be aware of what is going on. If you do not remain pro-active, it is possible that another buyer could jump in and purchase the home you wanted. You also have the choice to converse directly with the seller if it is agreeable to both parties. The negotiation process can go on for an lengthy period of time, or it can be very short. It is important to be very patient and simply remain aware of what is going on. Maintain a professional relationship with your agent, and don’t hesitate to ask questions. By keeping up with the process, you are much more likely to get your home and to get it for a price you will be pleased with.

Find a great property in Arizona in these Tucson communities: Continental Ranch Homes for Sale or Continental Reserve Homes for Sale

How to Bid on Real Estate / Author: Anita

Occupation: Writer
Anita has a BA in English literature and writes about real estate related interests.
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