How to Decide How Much to Bid for a House

It can be so difficult to decide how much to bid. You may love the house and not want to bid too low, but also not want to bid too high and overpay or loose the home because of an appraisal contingency. To complicate matters you need to realize that real estate agents receive a percent of the sale as a commission so have an interest in maximizing the sales price. Here are tips on deciding how much to bid.

Difficulty: Easy

Instructions

1. 

   The first step is to talk to your realtor and get their input. Often they know what the local market is like and can give you an idea of what a bid that will definitely get accepted will be and what the lowest bid that would have a chance would be.

2. 

   The next step is to ask the realtor to send you comparisons of other homes in the area that have sold in the last 3 months and what their sales price was. Please pay close attention to square footage, number of bathrooms, and the condition of the house.

3. 

   Now go online to websites such as zillow and look at sales in the area, tax records, and estimates of the value of the home.

4. 

   Now get out a piece of paper and write the pros and the cons of the home. Think about how much you really want it and how much you really would be willing to pay for it.

5. 

   Now think about who owns the house. If it is bank owned you have a bit more risk that they will not do many counter offers, instead they may just take the top offer or tell the top 3 offers to give a last and best offer. If you are dealing with a bank property you may want to give the highest offer you would be fine with first.

6. Now think about your time frame. Do you have plenty of time to look around? If time is not an issue then you may consider making more low ball offers so that you can get the best possible price for the house. If you are currently paying rent then you may consider the cost associated with delays in purchasing a home. The cost of these delays should be considered in your bid.

7. Next calculate any and all possible repair costs. Look at your finances and decide how much you can afford to spend on a home and still afford to make the needed repairs.

8. Last but not least listen to your gut and heart. If your gut is telling you that this is perfect then consider bidding at your maximum so you will have no regrets. If this is one of a dozen homes that are an option then lowball because there will be another option out there.

Tips & Warnings

• Think about repair costs
• Think about if it is bank owned
• Think about how much you want the home
• Think about what you would be comfortable spending on it

[missnye]

on 11/16/2009 Buyers regret can be really huge on an investment this large. Great article!*****

[barbarastanley]

on 11/2/2009 Great article. Making a bid on a house can be nerve-racking. You gave great tips. 5*

[langleycornwell]

on 10/30/2009 Very good information. All the old rules have changed with this economy.

[harvard]

on 10/25/2009 Great article. I've been hearing that if you REALLY want the house that holds your interest ofter a little over the asking price. All houses need work after you move in and unless this includes major rennovations you were not made aware of you should not get frustrated. Nothing's easy in this world. Thank you.

[tachic]

on 10/10/2009 Great tips to put a good bid on a house.