How To: Bid on a house

Buying a home is a big step so find out just what is involved when you are ready to bid for the house of your dreams. The whole process can be bit nerve-racking but as long as you stick with it you'll be a home-owner in no time.

You've found the right home in the right location and now you're ready to make an offer. Learn what steps to take to make the home yours.

You Will Need

* Real estate agent
* Loan pre-approval
* Down payment
* Multiple Listing Service
* Patience

Step 1: Choose a real estate agent

Select a real estate agent who is willing to accommodate your needs and specializes in brokering the type of property you're looking for.

Step 2: Get prequalified

Get pre-approved for a loan so you'll know exactly what you can afford.

Be prepared to put down between 5 and 20 percent as a down payment, depending on the type of loan and your credit rating.

Step 3: Research available homes

Use your city's Multiple Listing Service to find and tour available homes.

Step 4: Select home

Choose the home you want to bid on. Your agent will find comparable sales in the area to determine a good starting bid.

Step 5: Make bid

Determine your bid price. Include your move-in timeline; the deposit, or earnest money amount, you'll pay; inspection and financial contingencies; and items, such as appliances, that you'll want included in the purchase price.

Step 6: Respond to the counteroffer

Accept or decline any counteroffer the sellers submit. Once the haggling is finished and the contract is signed, a closing date will be set. Get ready to move in!

In 2009, one study about 20 percent of American homeowners – about 20 million residences – owed more than their homes were worth.