Every now and then in the world of real estate, several potential home buyers will come across the very same "perfect house” at the same time. The result is what is commonly known as a bidding war. If you happen to find yourself engaged in competition with another potential buyer over your perfect house, this is how you can increase your odds of winning the bidding war.
1. Get your money in order. Everybody knows that money talks. However, many forget how well cash sings. The more you can put down in the beginning, the better off you're probably going to be. If you do need to get a mortgage, work out as many of the particulars as you can by getting pre-qualified and show the buyer you're ready to move forward.
2. Make the first offer matter. There is a whole lot of gray area between over-paying and low-balling. Decide what you're really willing to pay just shy of the asking price and leave some room for negotiations. The first bidder always has the upper hand. Put your best foot forward and let the seller know you mean business.
3. Cut down on the contingencies. Delays give sellers more opportunity to be nervous. As much as you're able, waive whatever contingencies that will slow down the sales process and keep you out of your perfect house.
4. Write in an escalation clause. Decide how high you really want to go, and include a clause that states your winning bid will only up to a level just above competing offers.
5. Pre-inspect. If you're really serious about the house, and you're ready to invest a few hundred dollars you may never see again, ask to do an inspection of the house before you make an offer. It will ensure you really want to go the distance with the house, and it will get things out of the way so you and seller can move forward without further delay. Of course, this also cuts down on contingencies, which the seller will love.
6. Keep your phone on. If you're in a bidding war, time is often of the essence. While it's a beautiful thing to turn your phone off at the end of the day to just relax, save your realtor some anxiety and be ready to answer the call if a quick response is needed. Turn your phone off after the deal is done.
7. Let the seller know how much you love the house. Generally, people selling homes are human, fully equipped with an emotional side that loves to see people be happy. If a house really speaks to you and you see a future in it, don't be shy to write a letter to the seller letting them know why you are the perfect person for the house. If nothing else, even if you never send it, this kind of visioning exercise can help you better articulate what you really are looking for in a home.
8. Keep it real. Emotions aside, you're buying a home in a fluctuating market. Having a vision for your future in a particular home is a beautiful thing, but don't let it completely cloud your judgement or cause you to overpay. Do your research and know there is a perfect home out there just waiting for you.
I hope you'll find these tips helpful and they come in handy if you find yourself in a bidding war over the home of your dreams. If I can help in any way, don't hesitate to reach out.
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Sarasota Area Real Estate Specialist