If I walk away from the deal before closing on a house, won't I be penalized?
Probably. Another offer may come in that has no such terms, perhaps at an amount equal to your bid. Naturally, the seller will choose the better deal. You could also lose a portion of your "earnest money" deposit, which you have given to initiate the transaction. Check with your bank or mortgage adviser to discover its practice, and at what point you can walk away from the deal without losing any money.
How do real estate agents work?
A real estate agent is hired by a seller, and is paid a commission after the home is sold. Real estate agents who work on behalf of buyers understand both buyers' needs and the available listings in the desired areas. Their expertise is essential in guiding you to the right house.
What is the multiple listing service (MLS)?
The multiple listing service is an electronic database of every property for sale nationwide. Realtors access this information to help search for all properties listed by realtors in order to identify specific choices for their clients.
What are "comparables"?
Comparables, or "comps", are houses that are physically similar to your house in a specific radius from your target house that have sold recently. You can gain intelligence as to the "market price" of a house by reviewing the price at which comparable houses actually sold. Real estate appraisers will identify comps in order to ascertain the current market value of any real estate.
How can I use comps to negotiate a better house price?
You can use comps to negotiate a better house price by discovering what is deficient about your target house compared with the comps, and telling the seller and your realtor when you make your offer. You might say, "We are offering $5,000 less than your sales price because all the comps had central air conditioning, and this one doesn't." If the seller is motivated to sell, he may accept your offer, and reduce the sales price. Comps are usually provided by each client's realtor.