Lucky you! After a long house-hunting adventure you’ve finally found that one property that you want to call home. You should celebrate. But not for long, as the process of actually acquiring said house has only just begun.
If you love this property, then odds are, others love it just as much. This is when the bidding war for the home begins, and buyers start to build their offers and strategies on how to win. Bidding wars can be stressful, emotional, and often get quite messy.
This is why it helps to know which steps to take before the war even starts. Every sale is different. Unique sellers with unique requirements, agents who are better than others, and buyers with more passion, are all factors which play a huge part in who will end up with this dream property.
Our general list below on how to win a bidding war will definitely help, even in small way. Have a look.
Review, Research, Assess
At this point in your home-buying journey, you have spent a considerable amount of time viewing homes, talking to professionals, and understanding the real estate market. So, you should have a good understanding of how far your budget can take you. Or, you found the home of your dreams right away, in which case most fellow buyers immediately dislike you.
No matter your situation and experience, you have now found the home you want and it’s time to prepare an offer. However, before that, you and your realtor need to review and assess the most recent sales comparable to the home in question. This way you will be able to determine its approximate value, and make an informed, well-thought out offer.
You don’t want to pay too much, and the seller doesn’t want to sell for too little. The key to a great offer is finding the middle ground which leaves both parties happy. Take the local market trends and estimated demand for the property into account, and your offer will be even stronger.
The asking price is almost never the final price of a home up for sale. There is always some wiggle room, and different factors which can determine the final sum you’ll have to pay for the home of your dreams.
Have your agent find out anything they can about the seller’s specific circumstances. Their current move, previous experiences with buyers, and time frame all play a crucial part in the sale. The more information you have, the easier you can adapt and ultimately help the seller, who in turn may accept a little less on the final price.
Some sellers may want to sell as quickly as possible, while others might want to drag it out a little, to make the move to their new home a little smoother. Others, in different ways, may seek insurance and the safety that you won’t back out of the sale. Accommodate, and be accommodated.
Remember- through all the paperwork, agents, bargaining, and stress, there is a human being on the other end of the transaction. This person has created memories in the property you plan to buy, and has grown attached to it. At the end of the day, home purchases and sales are very emotional.
A letter, especially a hand-written one, can really make a difference and show the seller that you, too, understand the difficulties of moving and changing home. Some comments about how much you love the house and how you plan to make it home, might make it easier for the seller to let go.
Compliment the house and mention everything that drew you in, making you fall in love with it. It’s best to avoid any negative comments about the property. Mention any plans you have to make the property your home, and, if you are planning to start a family, throw that in too.
You never know what will pull at someone’s heartstrings.
See-through, organized financing will always set you apart. Your offer consists of and is affecting by many factors; it’s not all about the final price.
The deposit is important and instils a sense of safety for the seller. Consider providing a larger sum than the requested amount. If you are 100 per cent about the house then you don’t lose anything, and gain the seller’s trust.
While you should always be cautious and never put yourself in needlessly difficult financial situations, it is true that certain mortgage programs will be more attractive to sellers than others. Do your research and discuss your options with your lender.
A knowledgeable, trustworthy, and straight-forward buyer is something all sellers search for.
An escalation clause is a handy tool to incorporate into your offer, which will guarantee you a fighting chance in the bidding war. Basically, an escalation clause incorporates incremental rises, as the price and bids increase above the asking price. A cap is put in place, showing how far you are willing to go.
For a property listed at $300,000, your offer can include an escalation clause up to $320,000 rising in $5,000 increments. If the highest offer was $310,000 you would then have to pay $315,000 and so on and so forth.
Take Your Time
Perhaps the most valuable and underrated point on this list, remember to stay calm and take your time. In fast-paced, highly competitive markets, too many buyers rush in, grow frustrated and stressed, and end up making a rash decision which often leads to bad decisions and buyer’s remorse.
This can all be avoided if you simply stop, breathe, and properly review your situation. Put your emotional attachment to the property to the side, and look at your offer logically. Work with your agent, build the best offer possible, and wish for the best.
No matter how much you worry and stress, in the end the strongest offer will win. Staying organized and ahead of the game will get you there, and a little luck won’t hurt either.