Winning The Bidding War
There are many active buyers looking for their next home right now, but inventory is low and multiple offers are common. It can be stressful making an offer on a property you’re in competition for, but there’s more to winning a bidding war than having deep pockets. Here are seven strategies to help you navigate a market crowded with buyers.
1. Enlist a Trusted Real Estate Expert
By far, the most effective tool you have to win a bidding war is a Realtor® who is skilled at negotiation. At Faris Team we ensure our sales partners receive ongoing training beyond their real estate license, which includes the art of negotiation. When interviewing an agent, ask how they keep this skillset sharp; your real estate team’s top priority should be offering every possible advantage to their clients, especially when an offer goes into competition.
2. Beef Up the Deposit
The size of the deposit has an impact. You don’t have to put a six-figure deposit down, but the bigger the deposit, the more attractive your offer will be. If you don’t have the additional funds on hand, you can give a further amount upon removing all conditions.
3. Be Flexible
Flexibility is often the trump card to a winning bid. Be as flexible as possible when it comes to details like the possession date, and if you can, offer a window of time you can accommodate as opposed to a specific day. Two or three months is traditional, but some sellers may find a shorter closing better suits their needs.
4. Scratch the Conditions & Inclusions
To rise to the top in a bidding war, ask the least of the seller. Opt out of conditions like financing and inspection and skip requesting inclusions in the selling price. You can bolster your bid further by offering proof of mortgage preapproval or other documentation that confirms you can financially complete the transaction. Remember, once you scratch the above conditions, you are committing yourself to closing on the home, so be certain. Ensure financing will not be an issue and conduct an inspection before submitting your offer so there aren’t any surprises down the road.
5. Do the Math
Your Realtor® will help you determine the real market value of the property in question, which can be worth much more in a hot market. Once you understand its value, calculate the maximum amount you can pay and decide what you’re willing to pay for this particular home. Finally, bid an odd number. Bidding $651,200 instead of $650,000 will make your bid stand out from the crowd, and that seemingly insignificant $1,200 may be just the right amount to put you out in front.
6. The X Factor –You
The price you’re offering to pay is critical, but so are you. Most homeowners have an emotional attachment to their home which is why finding a “match” can be as important as receiving top dollar. When it comes time to make an offer, consider adding a personal touch like a family photo or a brief, handwritten note about why you love the home. It could be the very thing that separates your offer from the rest.
7. Know When to Walk Away
Sometimes the only way to win is to walk away. As the saying goes, buy the most expensive house you can afford. If a bidding war ends up driving the home’s price outside of your budget, it’s not the house for you. But rest assured, your Faris Team sales partner will help you find the one that is.
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