Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

If we REALLY like a house and feel like its priced fair- how close to asking price should we start our bid?

I'm honestly afraid of losing another house because our opening bid wasn't strong enough, but I don't want to overpay for a house either!

We're going to see it tomorrow. I'm expecting the house to not really be updated at all (i.e. panelling, original kitchen, pink&black/green & black bathrooms, etc.) But the house has SO many things on our must have AND wish list, I just don't want to lose it because we were being cheap.

FTR- we need an FHA loan so we're not going to be able to pay above appraisal.

I know my REA will guide me but I just want to make sure I'm prepared.


***ETA***

If you knew there was going to be an open house for this house this weekend, would you still make the bid ASAP??? Now I'm definitely concerned we're going to be competing with others for this house.

Message edited 5/12/2011 10:11:16 AM.

Re: Bidding Strategy Advice Needed

if you are going to ask for a seller's concession to roll in part of closing costs take that into consideration because the total loan amount can't be higher than the house will appraise for. I would look at recent comps to see what houses sold for in the neighborhood that was about the same square footage, number of baths, bedrooms and property size.

Re: Bidding Strategy Advice Needed

If you think the house is priced right and you can afford it, I would honestly just offer what you think it is worth and what you want to pay. And only you know that.

A lot of people will say offer $20K less than asking and negotiate from there, but there's no guarantee the sellers will negotiate (whether or not that is a smart move). If you really want a house, sometimes the thing to do is just make your best offer. My first listing that I ever sold was priced at $479K, and we got a $475K offer the second day it was on the market. We took it -- my seller didn't insult the buyers by trying to come back at $477K, and the buyers didn't waste our time coming in at $450K. They knew the house was priced right, and more importantly, it was worth it to them to pay that. No point in wasting time negotiating for the sake of negotiating when you can just get right down to it!

Of course, some houses are overpriced and you wouldn't want to pay that, and then making a lower offer and trying to negotiate makes sense.

But I always tell home buyers - don't approach the home buying process like an appraiser! That's not your job. You will have an appraisal done to prevent you from overpaying for a house -- if the house doesn't appraise for the contract price, you aren't going to pay that price (regardless of what kind of mortgage you get). So that's a built-in safeguard for you.

But if by "overpaying" you are talking about getting a house for $485K when you "maybe" could have gotten it for $480K had you pressed... is it worth it? I don't think so. Sometimes it's more worth it just to get the deal done and get a house you love. That's just my opinion, and the approach I took when I bought my house, and I negotiate for a living as a lawyer and now as a realtor. I just didn't want to sacrifice a lifetime of happiness in the perfect house because the seller wouldn't come down to the price we thought we should pay. So we paid a little more but we could well afford it, the house was well worth it, and we love it!

If you have a good buyer's agent, then he or she will advise you of the comps and come up with a good strategy with you for any offer you make. Good luck!

Re: Bidding Strategy Advice Needed

We really wanted our house, and wanted our offer to be taken seriously. We offered $100 above asking price.

Re: Bidding Strategy Advice Needed

We found the perfect house for us. We wanted it so badly, we offered asking with the stipulation to go to contract the next day.

To us it was worth not having to play the strategy card.

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

Thanks everyone for the advice. It definitely puts things into perspective!!!


Now I have another question- see the OP THANK YOU!!!

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

Don't let open houses scare you, be confident in your bid and go from there...I would put in an offer now but wouldn't get my hopes up until after the OH.

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

we saw a house on a thurs there was going to be an openhouse that sunday. DH did not want to wait! we saw the house put a bid that thur night and paid 12K under asking. we wanted the house and it was priced right

the OH was cancelled

Message edited 5/12/2011 10:47:34 AM.

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

If the open house is scheduled, it would probably go forward even if you have an accepted offer on the house. If the house is not in contract and the inspection needs to be done, the listing agent would likely go ahead with the open house (because it's already scheduled and promoted, and to protect the sellers in case the deal falls apart).

But keep in mind - in my experience, it is pretty rare that someone who comes to an open house actually buys the house by making an offer on the spot. Often, people come in off of the signs and don't really know much about the house (price, layout, etc.).

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

Message edited 5/12/2011 11:41:07 AM.

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

if you REALLY like a house and feel that it is priced fair... i would offer asking.

do you think it will move? if you REALLY want this house and comps are proving that its priced right, I would offer full.

we were closed out of a few homes for this very reason. if we had offered full, we could have gotten the homes.

even the home we are in contract for, we offered full the first day. if we had tried to negotiate, we would have lost it (5 other full price offers came in) we would have been immediately closed out.

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

open house - if they have one scheduled, they will have it and then wait a few days after to let offers come in. if you want to be ahead in the game, get your offer in now.

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

oh and please send me the MLS

Re: Bidding Strategy Advice Needed **UPDATE WITH ANOTHER QUESTION***

We saw our condo and made an offer 5K over the asking because it was 7 years ago and we WANTED it.

Now we saw a house on Saturday, we know it needs a lot of updating but we wanted to be the first offer in before the open house so we put it in today. We took a chunk off the top for the updating, but we are hoping that we we will appeal to the seller as we have nothing to sell (we are living with my parents) but are also not in a position where we NEED to move ASAP (because we ARE living with my parents). Hope this makes us appealing.

Fingers crossed for all of us!!!