General Question

silexicon's avatar

After being approved for a home loan, what's the best way to negotiate a bid?

Asked by silexicon (31points) September 25th, 2007 from iPhone
Observing members: 0 Composing members: 0

2 Answers

synapse's avatar

First of all, it’s not an auction, so the correct terminology would be “make an offer” not a “bid.”

Check out the local property appraiser’s website or search the local records to find out what the current owner paid for the house and when they purchased. Find out if the current owner is relocating to another city or state to determine their degree of urgency in selling. Find out how long the house has been listed for sale. If the owners have already purchased another house, they are still having to pay the mortgage, taxes, insurance, maintenance, etc., and it’s in their best interests to sell and they make take a much lower offer. If they’re holding out for a higher price, determine how much it will cost them to keep the house on the market for 6 months waiting for a higher offer.

Search comparable houses (square footage, # bedrooms, # bathrooms) in the multiple listing service, what’s currently for sale and most importantly, the recent sales in that area to determine price per square foot.

If you go in with a low-ball offer, the worst that can happen is they refuse the offer, and then you can always submit a higher offer. A smart owner will counter-offer any offer if they’re serious about selling. Some folks just list their house for sale to see what someone will offer.

Remove all of your emotions from the transaction – this is a business transaction. Your loan approval shows you’re a serious buyer, that you’ve taken the steps to put yourself in the best position possible, and the seller doesn’t have to wait on your loan approval.

A generous earnest money deposit (sometimes referred to as escrow) will also show your serious intent.

Don’t forget to get a home inspection and write in the contract that the offer is contingent upon YOUR sole approval of the inspection findings.

Good luck.

silexicon's avatar

thx synapse. i should have said offer instead of bid. ive done most of what u mentioned & my realtor was supposed to talk with the owners today. im crossing my fingers. the house has been on the market since June, so we’ll see how interested in selling. :)

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