You've been preapproved for a mortgage loan and know exactly how much you can afford. Now, it's time to decide what you're willing to pay for the place you want. Here are some tips on how to choose a home that meets your needs and your budget:
Be careful if you bid low, however. The seller may not bother to counteroffer or come down only incrementally, leading to round after round of negotiation. Another buyer might come along and snatch the property away for a few thousand dollars more -- a price you might have been willing to pay anyway.
Buyer and seller usually reach agreement after a couple of go-arounds.
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Put It in Writing
Do your negotiating in writing. Don't reveal your strategy, and don't make oral offers. You want to buy the house, but you don't want to hand over your money until you're sure the seller is legally capable of conveying a good title and meeting other conditions. The seller, in turn, doesn't want to deliver the deed until you've paid for the property.
Now what? You (or your representative) present the seller with a written contract setting out the commitments and promises that you and the seller need to agree on and fulfill in order to make the sale.