Buyers Should Know . . .
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• Mortgage interest rates can change quickly, pushing a home out of your budget in a matter of days. Check in periodically with lenders before making a bid to get an up-to-date estimate of monthly payments based on current rates.
• Include in your offer a requirement that the sales price be equal to or less than the appraised value as determined by the mortgage lender. Without such a contingency, a lender can require the buyer to make up the difference between the appraised value and the sales price.
• Do your research. Compare the price of the home you are interested in to the prices of similar homes on the market or recently sold. In areas where home prices have been falling quickly, some real estate agents recommend narrowing the data to the last three or four months instead of year-old sales that may be outdated.
• If you decide to bid significantly below the asking price, be prepared for rejection. A lowball offer could be flatly rejected by an annoyed seller or viewed as the starting volley in negotiations.
• Don't assume that because the price of a home has been reduced, there isn't more room for negotiations. Research prices in the area, and compare the lowered price to recent sales.
