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What to do Before You Bid on a Home

You’ve found a home that meets all your non-negotiables, and has a few bonus features that you love. You’re ready to make an offer- but what should you do before you take the plunge to ensure you get the best price possible? There are a few things to keep in mind.

First of all, you will want to check the comparables in the neighborhood. This means checking how much nearby homes with similar features sold for recently. It will give you a rough idea of what you will need to pay for the home you want to buy. While you’re at it, check how long the home you want has been on the market. If it’s been for sale for a while, the buyer might be willing to accept a bid that’s lower than the comps. Even if the home hasn’t been for sale for long, are the buyers in a hurry? Do they need to move quickly? That may make them more willing to accept a lower offer.

Have a friend with real estate knowledge or building knowledge walk the property with you. While you’ll need to get an inspection before you sign the papers to buy the home, knowing if the property needs work before you place your bid will help you decide how much you’re willing to pay. A friend with real estate or construction experience will be able to spot things you might miss. If you don’t know anyone you can take to look at the home, ask the seller directly if there is anything wrong with the home that you should know about.

Find out if the home is on a flood plain (even if there’s no water in the neighborhood). Homeowner’s insurance doesn’t generally cover floods, so you’re going to have to get separate flood insurance if the home is on a flood plain. That means more monthly expense, which in turn means you might want to lower your offer to make room in the budget for the payments.

Find out how firm the seller is on the asking price. You can get this information by asking the seller’s agent directly. If they’re very firm, you know not to lowball your offer. If they’re more flexible on the price, you can probably go lower than what the seller is asking.

Finally, think carefully before placing your bid. Don’t bid so low that you risk insulting the seller. They might refuse your offer and not make a counter-offer, even if they’re in a hurry or the home has been sitting for a long time. Consider all the above factors, and make a bid that is fair and still within your price range.