When you find the house you want, you can't just hand over cash and move in. Instead, you have to make an offer on the house. To make a fair offer, ask your agent to provide you with a Comparable Market Analysis (CMA) of the house you want. A CMA will tell you what similar houses in that area sold for in recent months. Seeing how the house you want compares with others like it will help you determine if you are dealing with someone who needs to sell fast or someone who is just putting a ridiculously high price on his home to see who might go for it. Take note: Everybody asks for more than they are willing to take. It's part of the game.
According to the Home Buyer's Information Center, items that should be addressed in your offer include the price you're offering, concessions you want from the seller, financing contingencies that might affect your ability to pay your mortgage, anything found in the home inspection that needs repair, and the deposit you're willing to put down with the offer.
Be very clear about what is included in the sale, because you don't want to move in and find out the appliances or chandeliers you loved are gone.
Once you have made your offer, it's now up to the seller to accept it, reject it or make a counteroffer. If the seller accepts it, your offer essentially becomes a legally binding contract for you to buy to the house. However, if the seller rejects it or makes a counteroffer, it's time to negotiate. The main thing to keep in mind during negotiation is to stay realistic about it, and don't get caught up in the moment. If there are multiple offers on the house, you could find yourself part of a bidding war. Your first reaction may be to beat out the competition. However, once you've "won" the house with the highest bid, you may find that you've grossly overpaid. On the other hand, if you bid too low, the seller may not take your bid seriously and decide not to deal with you. A good real estate agent will help you through it.
Either way, you should always be prepared to walk away. If you can't make a good, reasonable deal on the house, you're getting ripped off. You have to feel you made the right deal. If you go into negotiations prepared, you should be able to make the deal you want.
