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How Much to Offer When Buying a Home?

written by: KellenKautzman•edited by: Donna Cosmato•updated: 6/29/2011

How much to offer when buying a house is simple. Shop extensively for a house that is below your budget and then feel free to offer more than the asking price, if you love the property.

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    The Typical Process

    How much to offer: Home Most real estate agents are interested in upselling you. They make the cheap houses seem less appealing and show you more expensive ones. Don’t be upset with them for doing this, it’s their job. Most people who are looking for a home search for the most expensive house they can afford.

    Assume that the real estate agent will push for the higher end of your budget, and that most people will buy a home for around $195,000 when their budget limit is $200,000. Unfortunately, they will be paying around $360,000 by the end of their 30 year loan, if they can’t pay down the principal with additional payments. They will spend too much on their house and have to give up things that make them happy like eating out, shopping, and vacations. So, how much should you offer when buying your home?

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    A Better Way to Buy a Home

    How much to offer: Good Idea 

    Whatever the bank approves your loan for, start looking for houses at half that price. If the bank approves your loan for $100,000 then shop in the $50,000 range. After seeing a few properties, you are going to want to start looking at more expensive properties. Resist the urge to jump into a more expensive house. You may end up finding a house for $55,000 that is an absolute gem for that price that no one else saw because they were too busy looking at more expensive properties.

    The best months to sell a house are May, June, and July. The best months to purchase a house are November, December, and January.

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    How Starting Low Affects Your Offer

    Now you have the seller at your fingertips. Look at how long the house has been on the market, the price of the neighboring homes, and feel free to overbid on the property, if you really like it. Make sure the offer is contingent on inspection. Now you can sit back and smile, knowing that you are still well below your budget and getting a home you really like. This feeling is well worth the time spent shopping for a less expensive home.

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    Your Real Estate Agent

    Find a good Real estate agent If you are planning on looking for a less expensive property, you are going to need a fantastic real estate agent. Patience is the key. Buying a home is an enormously important purchase, one of the most important financial decisions you’ll make. Your real estate agent should understand that, and help guide you through your price range without unnecessary upselling. One of the things you are going to want to do, as a bargain shopper, is to see a large number of properties. This has a tendency to make real estate agencies a little cranky. Talk to a number of real estate agents, let them know what you are looking for, and you should find a good one willing to walk you through multiple properties.

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    Overall

    Keep the price low so you can offer more. When you become accustomed to less expensive housing, you will feel better about how much money you saved on your home. Find a great real estate agent who will help you find that gem.

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