Dealing with the seller

The real estate market is more like a flea market than a department store; prices are determined through negotiation, instead of being fixed, or decided in advance. When you buy a house, you must negotiate the selling price before you can apply for a home mortgage.

Basically, the buyer and seller must agree on the price of the house. The traditional way that this agreement is made is by the buyer making an offer to the seller. (Offers should always be in writing.) If you are a first time homebuyer, it is best to seek advice for this process from a real estate representative, lawyer, or another person who is more familiar with the process.

Your offer is more likely to be accepted if you are willing to give the seller extra assurance that you (a) seriously intend to buy the house and (b) have the means to buy it. To prove your intentions, you might be required to make a deposit. To prove you have the means, you can secure pre-approval for your home mortgage. That way, the seller knows that you are guaranteed financing up to a certain amount.

After price negotiation has ended, a contract must be drawn up. This document should include basic information about the buyer and the seller, as well as any time limits (e.g., financing must be secured within a certain time frame) or stipulations (e.g., the house must be appraised for a certain amount) in your agreement. After both parties (you and the seller) have signed the contract, you are ready for the next step: obtaining a home mortgage.