6 bidding tips for first-time home buyers

Congrats! You are officially in the market for your first home. Understanding the fluctuating real estate market can be tough. Here are 6 bidding tips that can come in handy for all first-time home buyers.

  • Facebook.
  • Twitter.
  • LinkedIn.
  • Print

Congrats! You finished law school, threw a baller wedding and had a cute kid. Now the hard part: buying a home. Whether it's the fluctuating real estate market, or the seller's fluctuating mood, there are a million and one variables that could raise your blood pressure at any point in the process. So if you want that dream home (or any home), you're going to need some serious bidding strategies to edge past the competition. Here are 6 tips you need to know before you make an offer. Good luck.

Don't settle for your agent

Your real estate agent is your first and best line of defense when it comes to bidding. They should protect your interests, nudge you when it's time to compromise or stand your ground and, ultimately, help you close the deal. So shop around for an agent until you find one who has your back. The easiest way to tell from the beginning? Keep an eye out for the most obvious red flag: sending you properties that don't fit what you're looking for. If they don't listen to you from the get-go, they probably won't listen to you at that most crucial moment.

Get to know the seller

Once you fall in love with a property, it's time to do a little recon and figure out why the seller's saying "adios." If a young family is hightailing it out of the neighborhood due to a poor school system, use this during negotiations to lower the price. On the flip side, in a competitive market, a little human connection goes a long way. A retired couple who lived in the home for 40 years and saw the neighborhood completely gentrify might want to know their home will be passed down to good hands. If there's an emotional connection, make an emotional plea by writing a love letter.

Work your market like a boss

Even if you have a great agent and you've won the hearts of your sellers, you have the last and final word on what you end up offering. So know your market—whether it's a buyer's, seller's or balanced one—so you can be more confident about the decisions you make. Don't take your uncle's word for it: Do the research yourself to see what similar properties went for in recent months.

Embrace your dream home's faults

Of course, we all want to find our dream house. But it can also be to your wallet's benefit to lean into a property's downsides. For example, the cigarette smoke smell that's worked its way into the wallpaper over the past 20 years could actually be a good thing when it comes to negotiating: stipulate that the seller must get rid of the stench before you move in—saving you money on de-smoking the place later—or lower your offer significantly, saving you money on the purchase cost now. The gist: Anything questionable can be used to leverage a better deal.

Have your max price set from the get-go

Remember on Seinfeld when Elaine gets carried away in an auction bidding war and winds up spending $20,000 on a set of golf clubs? Don't be an Elaine. Work with your BFF the mortgage broker to get pre-approved for a loan before you even start your search. Calculate the highest price you can afford to pay (and make sure that includes closing fees, transfer taxes, inspections, etc.) to still have enough to live on (toilet paper, Champagne, cat toys, etc.). This way you'll be ready when a bidding war gets heated, and can negotiate around your parameters.

Know when to ditch the contingencies

A contingency is an addendum to a contract with the seller that protects you in case something wildly unexpected happens. Buyer's love 'em; sellers are so-so on 'em. For example, if the purchase of your new home depends on the funds you'd receive from the sale of your current home, you can toss a contingency into the contract. Then, if your current home doesn't sell, you walk away from purchasing the new one without losing money. In a buyer's market, you've got time to add contingencies designed to save you money down the road. In a seller's market, contingencies will make your offer look weaker.

Topics:
  • Home Buying
  • Making a Big Purchase
  • Home Buying
  • Making a Big Purchase
  • Home Buying
  • Making a Big Purchase
  • Home Buying
  • Making a Big Purchase
  • Facebook.
  • Twitter.
  • LinkedIn.
  • Print
Article copyright 2018 by PureWow. Reprinted from the April 16, 2018 issue with permission from PureWow.
The statements and opinions expressed in this article are those of the author. Fidelity Investments cannot guarantee the accuracy or completeness of any statements or data.
This reprint is supplied by Fidelity Brokerage Services LLC, Member NYSE, SIPC.
The third-party provider of the reprint permission and Fidelity Investments are independent entities and are not legally affiliated.

Votes are submitted voluntarily by individuals and reflect their own opinion of the article's helpfulness. A percentage value for helpfulness will display once a sufficient number of votes have been submitted.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

866363.1.0
close
Please enter a valid e-mail address
Please enter a valid e-mail address
Important legal information about the e-mail you will be sending. By using this service, you agree to input your real e-mail address and only send it to people you know. It is a violation of law in some jurisdictions to falsely identify yourself in an e-mail. All information you provide will be used by Fidelity solely for the purpose of sending the e-mail on your behalf.The subject line of the e-mail you send will be "Fidelity.com: "

Your e-mail has been sent.
close

Your e-mail has been sent.
piggy

Get more insights from MyMoney

Just sign up and we'll email our latest thinking every 2 weeks.
Not sure? Learn more
We understand that privacy and security are important to you and will only subscribe you to the MyMoney newsletter. See our Privacy Policy.

Here's what we suggest you explore next

Investing tips: Is it better to go bankless?

When you're just starting out in your investing journey, there are some important things you should know.

Like your checking account, but with some useful extras

All ATM fees reimbursed. No minimum balance. Pay bills. Deposit checks.

You might also like

Getting a mortgage when you're self-employed

Getting a mortgage when you're self-employed can come with a few extra steps. Learn important information about being approved for a mortgage.

A cheat sheet for first-time home buyers in today's tight market

Potential first-time buyers have been forced to compromise when making their homeownership dreams a reality. Read more about first-time home buying here.

5 millennials who become homeowners in their 20s share their best advice for buying your first house

Millenials are waiting longer to buy homes, because buying a home is harder than it was in previous years. Read insight on paving the path to home ownership here.

Like your checking account, but with some award-winning extras

All ATM fees reimbursed. No minimum balance. Pay bills. Deposit checks.