The Home Buying Process

Dated: 03/29/2016

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The Home Buying Process: Applying For a Mortgage Loan, House Bidding and More

Bidding on the home of your dreams can be a simple and straightforward process if you know what to expect. Use these tips to navigate the home buying process for your next home.

Starting the house bidding process

When you start the bidding process for your next house, there are three factors you should consider:

  1. Get prequalified for a loan. It’s important to get prequalified for a mortgage before you ever put an offer down on a house. Do a mortgage comparison to find out which type of mortgage loan is best for you. Whether you’re looking to borrow from a bank, a credit union or another financial institution, getting preapproved for a loan lets you know how much you can spend. 

    Be sure to have all preapproval paperwork already in-hand to give to the seller when you go to make your offer. This preapproval will make your bid much more attractive.

  2. Understand your home-buying rights. Before bidding on a home, make sure you know your rights as a homebuyer. For example, did you know you have the ability to 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.

  3. Determine your initial offer. Think about the maximum price you’re willing to pay and start bidding with an offer that gives you adequate room to negotiate higher, if need be. Your main objective is to maintain your budget even 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? All of these things factor into the final price you’re willing to offer, and how much the seller is willing to come down. 

    Be willing to give a little on your end, too. Sellers appreciate flexibility when it comes to factors like pushing back the closing or move-in dates.

Waiting 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.

Determining a counteroffer

Receiving a counteroffer is a very typical response. In this case, you have three options:

  1. Accept their counteroffer.

  2. Make another offer.

  3. 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 repairs that are needed, are you willing to assume those costs, too?

  • If you’re willing to accept their counteroffer, is there an appliance or other amenity, such as the washer and dryer or light fixtures, that you’d like to include as a negotiation tool to balance the increased cost?

The negotiating process is a matter of give-and-take, so make sure to consider how much you are willing to give, in order to buy the house you want.

Coming to an agreement

Sometimes the house bidding process goes for only one round, and other times it goes on and on until both the buyer and seller feel comfortable.

Once you finally reach common ground and an agreement can be reached, the bidding process has ended. However, the home buying process isn’t finished quite yet. Once you agree on a purchase price, you can now move forward with inspections, paperwork and settling on a lender that can give you the mortgage loan that fits your budget.

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Shirley Henderson

Being transplanted into the little town of Easley in 1969,from Ohio was a great shocker. So,I guess you could say I'm a Half Breed Southern. I’ve really enjoyed the people and the quietness of the a....

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