The real estate industry has a popular saying: “All’s fair in love, war and real estate.” For buyers, getting into a bidding war can be brutal…except for one lucky winner. In today’s heated market, homes in sought-after neighborhoods can command multiple offers and the sold price often well exceeds the asking price.
So how do you come out on top? Here’s our favorite expert advice from the pros including TV’s most favorite real estate agent, Modern Family’s Phil Dunphy. Oh and don’t forget to download the “Ultimate Resource Guide to Winning a Bidding War.”
Before You Bid…
Get a Great (But Nice) Agent
This sounds silly, but trust us. Your real estate agent should be a good negotiator, but this doesn’t mean that they should be aggressive or mean. Top negotiators will listen to both sides of the story and then figure out how to get the best deal for their clients. Your agent will be representing you directly to the seller. If your agent isn’t a nice person, or is overly aggressive, they can turn the seller off you. (Kim Kehoe, Bosley Real Estate)
Get Pre-Approved for a Mortgage
If paying all cash is not an option, you must get pre-approved for a mortgage before making an offer. You’ll get a letter to submit with your offer that shows the seller how much money you qualify to borrow. In a scenario where a seller receives multiple bids, you’ll automatically count yourself out if you are not pre-approved. (Platinum Home Sales)
Do Your Research
Before putting in an offer make sure you’ve researched everything. That includes the neighborhood, schools, accessible transportation, traffic – everything. All of these things play a part in the value of your home. (Scott McGillivray)
And part of that research includes running a Housefax Report for a more complete picture of the property. Past fire incidents, recent building permits (or lack of), and a natural hazard risk assessment all play into the value of the home.
Once You’ve Put in an Offer…
Most sellers like to close fast. If you are in a multiple offer scenario, it’s best to make an offer with few contingencies. That may mean forgoing repairs or added appliances and features. You can always ask for an extension if you run into some issues. Keep in mind, we never recommend foregoing a home inspection. (Aldo’s Realty)
Consider an Escalation Clause
An Escalation Clause is an addendum to your offer stating that you are willing to increase your offer incrementally up to a certain limit if any other offers come in that match or top your initial bid. For example, say you offer a $300,000 bid with a $2,000 escalation up to $320,000. That means your initial offer is $300,000, but you’re willing to pay $2,000 more than the highest offer until the price reaches $320,000. After $320,000, you drop out. This shows the seller you’re serious and willing to go the extra mile to win the bid. (Dream Casa)
Do you really love the home? Can you imagine your kids enjoying that backyard tree house, or see your dog loving the enormous yard? Then write a letter to the seller explaining your reasons for wanting the house. Appealing to a seller’s emotions can be incredibly persuasive, and you may be rewarded with the winning bid. (Platinum Home Sales)
There are generally two types of buyers in a bidding war. Those who play into the madness and those who stay objective. We encourage the latter, and a good real estate agent will recommend the same. Oh and always run a Housefax Report first – Know Before You Bid!
Before you go, don’t forget to download your FREE copy of the Ultimate Guide to Winning a Bidding War. GOOD LUCK!
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