HOW TO WIN A BIDDING WAR
Today’s market is unlike any other, inventory is getting low and buyer’s are becoming cut throat. Realtors are seeing multiple offers being put on homes and prices going as high as $50,000-$100,000 over asking. These price inflations are caused by bidding wars which ultimately can get the buyer caught up. If you become too emotionally invested, you may be making an offer that isn’t even worth it for the home you’re looking at. There are many ways that you can win a bidding war even without making ridiculous offers. Here are a few tips that can help.
Get a preapproval
The first step you should take when you begin seriously searching for a home is to get a preapproval for a mortgage. This helps show the seller that you are not only serious about buying their home but you are also qualified. Another bonus to having your preapproval is being able to move quicker, knowing that you have your financing partially together is completing half the battle!
making a cash offer
If you are maxed on your budget or simply do not want to go above and beyond the asking price, you may consider making a cash offer. If you have the cash available, this is something that can look more favorable to the seller than a higher offer. As opposed to a loan they do not have to wait for financing to go through, appraisals, which all around can mean a faster close and turnaround time.
working with an experienced agent
When dealing with things such as bidding wars it is important to work with an experienced realtor. Due to the intensity of today’s market and the high emotions that result, you may be inclined to making risky financial decisions. An experienced realtor will ensure that you are not paying more than what the home is worth and making sure you stay within your budget. Your agent will have your best interest at heart and ensure you are getting the best deal. Our agents have over 15 years of experience and work day in and day out towards getting our clients the best deals and into a home they love!
ADD AN ESCALATION CLAUSE
If you are unable to make an all cash offer but you were able to get preapproved for a comfortable amount then an escalation clause may be something to consider. An escalation clause basically allows you to increase your bid by increments until you hit your capped amount if a higher offer comes in. This can be a great way to help you in a bidding war to ensure you don’t pay more than what you feel a home is worth and you’re not constantly worrying about being outbid. Not all sellers are willing to accept this clause but it is always worth a shot if you are able to do so.
WRITING A PERSONAL LETTER
Sometimes the seller could warm up to your offer with something as simple as a personalized letter. Writing to the seller about what made you fall in love with the house, introducing yourself and your family, and maybe even including details about your offer can all help a seller relate to you and increase your offer’s chances of being accepted. If you offer something lower than they were expecting, explaining your situation may make it easier for them to sympathize with you. Writing this letter could help leave a lasting impression on the seller and make your offer stick out that much more.
Making a backup offer
If you feel like you’ve found your dream home but your first offer wasn’t accepted, then you may consider putting in a backup offer. What this means is that if the first offer falls through for any reason you get a second chance! There are some things you should consider if you decide to go this route. If your offer gets accepted then you are under contract which means you will not be able to make offers on other homes you may be interested in and it can be a process to back out. You also want to be cautious as to why the first deal did not go through. Make sure to note whether it was the buyer’s financing or an issue with the home. Be sure that you are 110% about the home before moving forward with a backup offer!
Bidding wars can be stressful but with these tips in mind, you’ll find the process much less tense. Flexibility with the seller, keeping a cool head, setting your limits and working with an experience agent will all work towards your benefit. And remember, you do not want to offer more than a house is worth or waive contingencies that may hurt you in the long run. And keep in mind, simply because your offer wasn’t accepted does not mean it’s the end! Finding your new home is a process, and our agents will guide you in finding that perfect home no matter what!
