Most people spend months, if not years, getting their finances together so that they can afford to buy their first home. You will want to look at all of the options when it comes mortgage loans and will want to decide exactly how much you're able to afford when you finally do bid on a property. Every dollar counts in this sort of transaction and that means that you will want to put some serious thought into what you're willing to offer for that trendy home you have had your eye on.

Before you decide on an offer price, you're going to want to take a look at the local market and see what similar homes have been selling for lately. Knowing if you're buying in a buyer's or seller's market is going to make a big difference to how much above or below the listing price you're going to want to be. Compare the listing prices and selling prices of local homes for sale that are similar size and in the same neighborhood that have sold over the last month. You can get this information from your real estate agent or can look it up online.

Make sure you really understand what you can afford. If you're buying in a buyer's market then you might not start with a price that is right at your limit. But, you should know where the point is that you'll have to walk away when it comes to negotiations right from the beginning. Deciding what you can afford will usually be all about the type of mortgage that you choose. Make sure you're selecting the one that makes the most sense for your finances rather than just the one that offers you the most money. If you do not fully understand the differences between variable and fixed, risk versus safe, etc; be certain you speak with a mortgage broker for clarification before signing your documents.

A home inspector we spoke to offers this advice: try to find out if there have been other people interested in the house. If the home that you're looking for has gone through months on the market and has seen people coming in and attending open houses, but without anyone making a move, then you can usually start out a little lower with your opening offer. You'll want to schedule a home inspection for sure in this case. (We recommend Springfield HouseMaster.) But, if there are three or four people circling around the home then you will want to be competitive and make sure that your offer price sticks out to the sellers. This is another piece of information that you might be able to get from your real estate agent doing a bit of research.




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