Start the house-bidding process
When you start the bidding process for your next house, there are three factors you should consider:
Get prequalified for a loan. It’s important to get prequalified for a mortgage before you even put an offer down on a house. Getting preapproved for a loan lets you know how much you can spend. Having prequalified paperwork already in-hand to give to the seller will also make your bid much more attractive.
Get a home inspection. Schedule your own home inspection before you make an offer. While one inspection is usually required between price negotiations and the closing date, you can use this early inspection to help you decide how much you'd like to offer in your initial bid or any follow-up counter offers. Although this early inspection is optional and would be an extra cost to you, it may be a useful tool in the negotiating process.
Determine your initial offer.Determine the sum that would be most comfortable for your budget. Start with a bid lower than your budget to give you room to negotiate. This way you can raise your offer without stretching beyond your predetermined top amount.
Submit your offer
Your main objective when making a bid on a house is to stay within your budget after the negotiations.
Determine which additional concessions you’d like the seller to make. For example, would you like them to cover the closing costs? Do you want them to leave the washer and dryer, or lower their asking price due to a leaky roof?
Be willing to give a little on your end, too. Sellers appreciate flexibility when it comes to factors like closing and move-in dates.
Wait for the seller’s response
After you've submitted your initial bid, all you can do is wait for the seller to respond, unless you specify a deadline for a response. Most often, an answer will come within a few business days, but it may come within a few hours.
Depending on what the seller decides, you may have another choice to make soon after your initial offer. Either they’ll accept your first offer, counteroffer or reject your offer completely.
Consider your counteroffer options
Receiving a counteroffer is a very typical response. In this case, you have three options:
- Accept their counteroffer.
- Make another offer.
- Reject their counteroffer and walk away.
If you decide to counter the seller’s counteroffer, it should be somewhere between your initial bid and their counteroffer. Also, you may want to reevaluate the concessions you’ve asked them to make with your initial bid. For example:
- If you've asked them to pay closing costs, would you be willing to withdraw that request and assume responsibility for closing costs?
- If they aren't willing to give you a discount for needed repairs, are you willing to assume those costs, too?
- If you’re willing to accept their counteroffer, is there an appliance or other amenity you’d like to include as a negotiation tool to offset the increased cost?
Complete the home-buying process
Sometimes the house bidding process goes for only one round. Other times it goes on and on until both the buyer and seller feel comfortable.
Once an agreement is reached, the bidding process has ended. However, the home buying process isn’t finished quite yet. You can now move forward with inspections, paperwork and your mortgage loan.