WHAT YOU NEED TO KNOW TO BEAT THE BIDDING WAR:
As the housing market continues to boom and hot areas even become hotter, home buyers find themselves duking it out for their dream house with many others. Holding offers, under pricing homes and sitting in parked cars with your agent have become par for the course in what’s known as bidding wars. These multiple offer scenarios can be confusing to navigate causing some to go way beyond what they can afford or what the home is worth. Human nature makes it easy to get caught up them – especially when you have been through one (or many) before and have lost out. So how do you compete and win?
Here are some tips to help you stand out from other bidders:
Raise the bar by showing how serious you are: Increasing your down payment, opening with your absolute best offer, eliminating conditions, being flexible on closing dates and ensuring you are ready to mitigate any potential problems will show a seller just how serious you are about their property. Price isn’t always king. A wise seller will also look for the most secure deal that meets their needs. One client had over 18 offers on their home and passed on the highest bidder. They opted instead for a buyer who offered slightly less but who met their closing date, was willing to provide a $50,000 deposit up front and had no conditions.
Know your bidding limit and stay within it: Before entering any real estate deal, you should always get pre-approval from your lender. Talk openly with the lender about potentially waiving any financing condition and what that could mean for you, as there is risk involved. Some banks may reject or reduce financing if they feel that too much was paid for the house. Getting your financial ducks in a row will allow you to confidently put your best offer forward without worry.
Make friends with your home inspector: If you are looking at high demand areas it helps to have a trusted home inspector (or at very least a contractor) on call to visit the property with you. Many waive the home inspection clause in order to put them in better standing when offers are reviewed but unless the house is relatively new you may want to give the place a once-over first. A trained eye can help you spot what savvy staging may conceal. Nothing adds to buyers regret more then having to shell out thousands for unexpected renovations.
Stick with a pro: This is where an experienced realtor will prove to be invaluable. It’s important that the person representing you at the table is someone reputable and who has local knowledge. I have seen many a buyer overpay because their agent did not know the area well. You want someone in your corner as serious about real estate as you are about the home you wish to bid for. A professional you trust can help keep your emotions in check and give you a good sense of market value. When it is all said and done a good realtor wants you to be happy and get your home at a fair price!