How to Make a Bid on a Home for Sale

Buying a home in a hot market (with rapidly increasing prices and relatively low inventory) may require you to pay above list price. Be prepared for a bidding war.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Plain Stationery

1. Get prequalified for a home loan and provide a letter of prequalification with your offer.

2. Be prepared to pay more than the sellers are asking. In a hot market, there may be several people trying to buy the same home at the same time.

3. Make your offer stand out. Make the terms easier for the sellers to accept by not asking for much - or any - repair work.

4. Increase your deposit. A bigger deposit makes an offer appear more serious.

5. Forget the extras. Pay for home warranties yourself.

6. Write a cover letter explaining how much you like the home and how it is perfect for your family. It might sound corny, but offers are often accepted just because the sellers liked the particular buyers and their families.

7. Let the sellers know the escrow period is negotiable. If they need 60 days instead of 30, give it to them.

8. If the sellers need a couple of days to move out after close of escrow, let them have it - for free.

Tips & Warnings

• When you get into this sort of market, emotions - not comparable sales and market value - tend to drive prices. Set your limit and stick to it.
• Real estate markets swing. What's up this year could be down next. Make sure there is an intrinsic, personal value to what you are buying.
• When you buy at or near the top of the real estate market, plan to stay for several years in case the market drops.

[resultsguy]

on 1/28/2009 Good tips for buyers...I have let several sellers stay in the home for a time after I closed...and to date have never had a problem. Then again I take away the risks by clear, written agreements.

on 11/22/2005 I do not suggest that you let a seller live there for free after you've signed the contract. I advise the buyer to have a contingency written in your contract, stating by date, when they should move out, or state a consequence like a daily fee. This can eliminate headaches and/or added expense for the buyer (if an attorney is necessary to move the sellers out). Buyer beware for everything. Most importantly, always hire your own real estate attorney, and interview at least 3 before you choose your final one. Take advantage of non-profit organizations that help clients for free. Many first time home-buyers are not aware that there are many grants available for them!

on 11/22/2005 Seems that we've always been in the market for a home when sellers got more than their asking price - and we've lost out by not "bidding" more than we set as our maximum. Don't despair - there is a home out there within your price range.