Is it true that your first bid on a house doesn't count, that it's just a starting point?

Question

I would love to just say,"I want this house for $187,000 and not a penny more." But I know that that's not how it works. I'm afraid they'll say no or worse they would've settled for less. What should I do!!???

Answer 1

When you submit an offer, it is a legally binding contract.

If you submit an offer for $187,000 ....

1 - they say "yes" you will never know if they would have accepted $180,000 because you just made a deal for $187,000

2 - if they say "no", they might make a counter offer, or they may just say no ... you can raise your offer, or not.  

Answer 2

I agree, once you submit an offer, you have a binding contract. If the Seller says no or counter offers, they are rejecting your initial contract. You would then have the option to walk away or make another offer.

If you are using a real estate agent, you will want them to look over the other houses in the area to make sure that the house you are interested in is worth what you want to pay (or what they are asking).  It helps to know how long the house has been on the market as well - the longer it has been on the market, the more chance you have of getting a lower offer accepted, but that is not always the case.  Many people in this market are in over their heads and do not have a lot of wiggle room when it comes to changing the price.

If you are not using a real estate agent to help you with your home purchase, you can usually find information on past home sales in the newspaper as well as through your local public records office (PVA). This will help you get a better feel for what the house should go for and if you are offering an acceptable amount.

I would try to go into the deal knowing what your bottom line is and be willing to negotiate to that point. Try not to make your first offer your "best and final".  

Answer 3

It depends on how much you want the house and what you're prepared to do if they refuse the offer. You CAN indeed say "I want this house for $187,000 and not a penny more." But if I as an owner will not accept $187k, then I wouldn't even counter-offer, I would just reject your bid outright and move on.

If the house is in great demand, they could very well receive offers that are very close to the asking price (look at how long it's been on the market). Also get an appraisal or compare the asking price to the selling price of similar houses in the area, that will get you an idea of what the house is really worth.

If this is truly the house you want, then make an offer as close to the asking price you can afford. The worst they can say is "no", not "we would have sold it for less". I never understood the strategy of trying to enter into a bidding war where you intend to bluff how much you are REALLY prepared to pay and how little they are REALLY prepared to accept.

Haggling and bargaining are wonderful strategies for street vendors. Not real estate.