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Making a Home Bid

Real Estate

A home bid is the part of the real estate buying process wherein a buyer makes a formal written offer to a seller. There are a number of important considerations when making a home bid that a buyer must be aware of.

Making a Home Bid

The first key to making a home bid is to determine exactly how much to offer. The seller's asking price can be a good starting point or guide. The asking price is the amount the seller has listed hat he wants to sell the house for. While many sellers will be reluctant to lower their asking price dramatically, the asking price should still just be a starting point in determining the appropriate home bid.

You don't, for example, want to pay more than a home is worth just because a seller has listed it at a high asking price. A seller may also be desperate to sell, especially if the home has been on the market for a long time, so he may be willing to entertain a home bid even if it is not especially close to his asking price.

So, while the asking price is a guide, you should also look at many other factors when making a home bid. Consider, for example, market conditions- is it a buyer's market with the supply of houses outpacing demand, or is it a seller's market with many buyers competing over properties? You will also want to look at what other similar homes have sold for, and whether there are any special circumstances- such as danger of foreclosure- that may make a seller lower his price.

A real estate agent can help you determine the appropriate home bid to make for a given piece of property. Real estate agents have extensive knowledge of the market and have a good indication of what a property is actually worth. The agent will help you write up your home bid as well, after you have decided how much to offer.

Your home bid should also contain contingency clauses. For example, your offer will want to specify that it is contingent on the home passing inspection; otherwise, if the house turns up potential problems during an inspection, you could lose any money you put down as a good faith deposit or any money you have in "escrow." You may also want to make your offer contingent upon getting a loan.

Generally, making a home bid is not terribly complicated as long as you know how to price the home and what clauses to include. An experienced real estate agent will know exactly how to make a home bid and will help you with every step along the way.

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