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MAKING AN OFFER
Are you ready to put an offer in on a house? Are you asking yourself, 'How much should my bid be?'. A good rule of thumb is to set your asking price 10% below your fair market value estimate, not the seller's asking price. Why? For a couple of reasons. First off, sellers will often involve their emotional ties into the asking price of their house. So, a bid of 10% less of the asking price may be too high of an offer. Also, the selling price asked by sellers is sometimes intended to be very high, with the seller hoping to get as much as they can for their property. But, the majority of the time, the seller will boost their asking price up higher than what they expect to get for the house because they want to leave room open for negotiation.

 

Prior to making an offer, in addition to calculating the fair market value of a house, it is a good idea to determine if the area you are looking to buy in is a seller's market, or a buyer's market. Knowing this will allow you to adjust you offer accordingly.

What is the procedure of making an offer.
Obviously you must make sure that the property you are interested is really what you want. Visit the residence several times. Drive around the community. If you have kids, research the school system. A good idea would be to ask questions to the seller and real estate agent before making an offer.

Person-to-Person
- When making an offer on house that is being sold by a private seller, and no real estate agent is involved in the transaction, you must present a written proposal that includes your bid, time you would like to close, and proof of financing. You should also insist on leaving a deposit. This will show that you mean business, increasing the chances that your offer will be accepted.

Real Estate Agents - An offer must be presented in writing when there is a real estate agent involved in the sale of a house. Typically, when an agent hears the word 'offer', they will whip out a piece of paper. This paper will have the details (price, location, size, etc.) of the property you are interested in. They will ask you to sign and date the paper and include your proposed bid. You will also be asked to leave a deposit of $500 - $1000. Normally, this paperwork will be presented to the seller's attorney within five days of you signing it. This will give you time to show it to your lawyer and/or change your mind about the property. However, if you do decide that you do not want to make the purchase, you will likely lose the money that you left as the deposit.

Understanding the fees associated with mortgages as well as what private mortgage insurance is will help you make an offer that you can afford.

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