How to Win a Bidding War
With home markets heating up all over the country and inventories of quality homes not growing as quickly as demand, there is a good chance you could find yourself in a bidding war for the property.
Nothing get emotions going more than money and homes, so it’s no wonder real estate bidding wars can get intense. When multiple buyers fall in love with a house stand back because there is a good chance logic and rational thought are going to take a back seat to wanting to “win.”
If you’ve heard that bidding wars are happening in your housing market or if you’re looking in a competitive marketplace for buyers, then you need to be ready. If you’re not prepared, then you could find yourself in over your head and paying way too much for a house.
Follow these simple tips and you’ll be the Bruce Lee of bidding wars and ready for anything:
Ignore the Obvious
At this point you might be thinking, “Isn’t the best way to win a bidding war just to offer the most money?”
Well, yes. That is correct. But you don’t just want to throw money at a bidding war and hope it all works out in the end. Plus, like most of us, you are probably restrained by your budget and financial standing as to what you can afford and are willing to spend.
And, research shows that sellers don’t always just accept the offer that is monetarily the highest. There are other factors that may come into play that you need to be aware of to win.
Too many buyers start talking to their banks or other mortgage lenders while looking for a house. If you find a home that you really like and a bidding war breaks out, you don’t want to still be working with a lender to know how much you can borrow.
Work out the financials beforehand and walk into a bidding war pre-approved. By not holding up the seller and being ready to go right then, you will have a leg up on anyone who is still waiting for a lender to process paperwork.
By setting up alerts and/or having an agent who is on top of things, you can see a home the day it is listed. In competitive markets, this isn’t just a luxury… it’s a necessity.
Be the first ones to the table with a solid offer and the proof that you can close the deal and you have a better chance of getting the home you want.
Work with the Seller
Find out if there are any special conditions your seller needs and do your best to work with them on it. This might mean a fast or slow closing date, letting them rent for a month or two until they find a home they like or something along those lines.
Price is the biggest factor, but there are so many others to consider when trying to win a bidding war that you or your agent need to do some research and find out what they really want.