How to win the next bidding war!

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Real Estate

It's a tough market for buyers today. If you've been looking for a house for more than a week, you probably understand to some extent just how crazy it is. When you find that house you love, then how can you win that contract when bidding against other buyers who are thinking the same thing?? 

 

What not to do and what not to do: 

Do not just give up and say "I'm not getting into a bidding war." I mean, if you don't really like the house, then that's fine. If you want to just hold off and not buy a house til the market (and probably interest rates) change, then that's fine too. But, this is the name of the game right now. The times of asking for 10k off the price, a home inspection, and just a $1000 deposit are over. accept that fact and just go for it! Because like it or not, the next house you find that you like will be the same scenario. Just put your best foot forward. 

Don't offer less than asking price. In fact, if there are several offers on a new listing, then full price may not be smart. However, most sellers allow for an Escalation Addendum. This is a way of offering list price, but then telling the seller that they can raise your offer to beat other offers up to a certain maximum number. For example, on a 200k house you offer 200k. The Escalation addendum says that the seller can raise your offer 2k over another offer up to 215k. 

Don't offer too much! There is always another house. Yes, even one you like as much as this one. Don't offer so much or so little that you'll have regrets. Put your best foot forward and nothing more. 

Don't write a "love letter" to the seller. Unfortunately you can't make it personal. There are some exceptions. But, in general, our society has become so hypersensitive to discrimination, that we all pay a price to keep bad players from acting badly. Sellers are basically not allowed to pick an offer because they just like one particular buyers story. Because picking one buyer because of some sentimental connection is now interpreted as discriminating against all the other buyers.  This is not a strong "do not" item but very rarely will that actually win the deal anyway. Additionally, if they don't pick yours, it could feel like a personal rejection. But at the end of the day the vast majority of sellers go for the most money/easiest deal. 

Make your offer the most money and the easiest deal! That's it in a nutshell. If you are paying cash, you still have to be competitive on price. If you are financing, then take responsibility for lender required repairs. Consider the value of the home inspection (condos and newer built homes are less risky for example). Find out what settlement date that the seller wants. Find out if the lender you are using is one that the seller feels confident in.

How can you make the deal easy for them? What's the most you can pay without regretting it afterward? Those are the two primary questions that will win you that next contract! As a side note, situations can vary and more specific guidance could be given. So have an experienced real estate pro in your corner! 

 

Happy Hunting!