Money doesn't actually talk. We do.

Buying a Home: The First Bid Falls Flat

We thought we’d found her.

After months of scouring Brooklyn for an apartment, my husband and I finally found a place that had it all. This beauty had two bedrooms, a wood-burning fireplace and a roof deck with sweeping views of the city. And it wasn’t in a soulless high-rise but a gorgeous brownstone brimming with details. We decided to make our first official offer.

A couple of days later, we were outbid. And crestfallen.We’ve been searching for a while now, discovering new neighborhoods, walking up countless flights of stairs and running down streets to catch the last open house of the day.

So when we walked into 123 Prospect Place, my husband and I were panting — largely because we ran up four flights of stairs to make it in before the broker locked the place up. But then we lost our breath for real: We really wanted this place.

The listing price was a bit more than we can afford. But it seemed reasonably priced, so we assumed there was little room for negotiation. The apartment did, however, have its drawbacks. It was on the top floor. The windows could’ve been larger. While spacious, it wasn’t huge.

But it was close enough, so we decided to make an offer of about 10% less than the asking price (I came up with that number by figuring out how much the going-rate was per-square-foot in the neighborhood). I called up our mortgage broker — I had sent all of our paperwork in a few weeks before — and had her draw up a pre-qualification letter stating what kind of mortgage we could afford.

We sent that, along with our official bid form, to the real estate agent. She said that we should know that she “already had a pretty good offer on the table.” Was she trying to intimidate us? Prompt a bidding war? Or was she simply being honest?

I had a feeling it was the latter. I suspected that the guy who saw the apartment right before us was probably the high-bidder. I only caught a glimpse of him – it was dark. But he seemed relatively young, probably single, and, in my mind, he was an investment banker that offered all cash. I called the brokerage to check in – it appears they got their full asking price and the deal is still on track.

While I’ve secretly wished that the buyer would have a change of heart (or fail to get a mortgage), it’s pretty clear we need to search some more. Somehow, none of the spaces we’ve seen after “the one” have quite measured up. But we’re hopeful there’s something even better in store for us.

In the meantime, we’ve learned a few things after making our first offer:

• You shouldn’t have to think too hard about whether you can “deal” with living somewhere, even if you’re on a tight budget. This is your home. Don’t compromise on the big stuff. It’s not unlike meeting a guy/gal or trying on a wedding dress. You want it – or you don’t.

• Don’t be afraid to make an offer below the asking price – hell, don’t be afraid to make an offer, period. It doesn’t cost anything (save for a little humility now and again) until you have to put down a deposit.

• Before making an offer, go see the place again. Memory is a notoriously selective beast, especially when we’re caught up in the excitement of finding something we love. After our first visit, we couldn’t recall exactly how many flights we’d need to climb each day. Turns out, it was a lot: four flights.

• Make an educated offer. Once you’ve found a place, do a ton of research before you place your bid. There are plenty of websites that will help you find comparable sales. Trulia.com, PropertyShark.com, and Zillow.com are good resources. And for those looking in the metro-New York area, StreetEasy.com is a great research tool. I’ve found that computing the going-rate per-square-foot in my target neighborhood is helpful.

• Know what you want and where you want it. If you find an apartment you adore in a neighborhood you don’t, move on. You have to walk out of the door everyday. That said, do start your search by exploring a few different neighborhoods. It will only reaffirm that you’re looking in the right spot.

As for us, we’ve got a little more walking to do. But we’re getting warmer.

–Tara Siegel Bernard
Illustration: Home Buyer’s Partnership