How to Go About Placing a Bid on a Home
- 1). Contact a real estate agent. You can find a real estate agent by asking for a referral from members of your sphere of influence. You can also find real estate agents who work with buyers in the telephone book and online. Although you can get the listing agent, the agent representing the seller, to submit a bid on the home for you, a buyer's agent works for you and protects your interests during the course of the home buying transaction.
- 2). Get approved for a mortgage. Buyer's agents rarely submit bids for unqualified buyers and seller's agents generally don't present such bids to their seller clients. You can apply for a mortgage loan at your bank or ask your real estate agent for mortgage lender referrals. Loan officers generally require prospective buyers to provide pay stubs, bank statements and tax returns to gain loan approval. You can also show proof of ability to buy the home by giving your real estate agent copies of your bank statements, if you plan on paying for the home in cash.
- 3). Research previous neighborhood home sales. Your agent can provide you with a comparative market analysis, or CMA, that tells you the prices at which similar homes in the neighborhood sold within the past month or dating further back. CMA data lets you know if the seller's asking too much for the home. Price may not matter to you if you can pay cash, but mortgage lenders generally scrutinize the home's bid price and approve or reject your loan application based on their own appraisal.
- 4). Write the bid. Writing a bid on a home means filling out the boilerplate sales contract your agent provides drafted by the area real estate board. A real estate contract includes information such as your offering price, the amount of your earnest money deposit, the amount of the home price you plan to finance, your proposed closing date and the attorney you would like to use to close the sale. The contract also allows you to tell the seller about any contingencies you place on the contract -- the conditions under which you can get out of the contract without fault -- such as home inspection and loan underwriting approval.
- 5). Submit the bid. Your real estate agent submits the signed contract to the listing agent by fax. The agent can also hand-deliver your bid to the listing agent to present to the seller. In competitive markets, you may end up resubmitting a revised contract to the seller, if other buyers outbid you and you really want the home. In such cases, your agent may end up driving to the seller's office several times, or sending multiple faxes, to encourage the seller's agent and the seller to accept your offer.
