If you are hunting for a house, be advised that the nature of your bid may determine whether or not the seller takes your offer seriously. Therefore, do these three things before making your offer:
Conduct a Comparative Market Analysis
A comparative market analysis (CMA) is a mini research tool that reveals more information about houses similar to the one in which you are interested. The houses should be located in the same neighborhood, have similar sizes, and have similar amenities. Property sellers use CMA to price their houses. For example, if similar houses are priced between $500,000 and $600,000, the seller is also likely to price the property within the same range.
A CMA will help you to know whether the property in which you are interested is priced within the range of similar houses. For example, if the CMA reveals that similar houses are going for $400,000, you will know that your seller has overpriced the house if they are demanding $700,000. Apart from pricing, the CMA will also reveal other useful information, such as the average time it takes to sell similar houses. This will help you to know, for example, if you need to rush to prevent other buyers from getting the house before you. Therefore, ask your real estate agent to get a CMA before making your bid.
Understand What Is Motivating the Seller
A motivated seller is one who truly wants to sell their property and is open to negotiations. Since most property listings attract this tag, it is important to dig beyond the phrase and learn why the seller is motivated. For example, a seller is motivated if they are in the process of buying another property and need to sell the current one as soon as possible. A seller may also be motivated if they have accepted a job offer overseas and planned to relocate soon. For such sellers, you may be able to negotiate an agreeable price even after making slightly low bids.
Learn More about Other Bids
If you are preparing to bid on a property, it's highly likely that your bid will not be the first or last one on the property. Since the seller will compare all the bids when dealing with different potential buyers, it's important to find out more about these other bids before submitting yours. That way you can craft your bid in a manner that makes it stand out from all the others. For example, it might be helpful to make a slightly high offer if many people are interested in the property.
As you can see, making a bid isn't just about quoting a figure that you think is right for the property. In addition to the three factors above, talk to your real estate agent for further advice on property bidding.