A bidding war is like an auction — with much higher stakes.
You found your dream home. It happens to be the same dream home for 3 other people as well. How do you set yourself up to win a bidding war.
RELATIONSHIP WITH YOUR REALTOR
For starters, you will need to have an even closer relationship with your realtor. This is especially true if you get in the back and forth of escalating offers. Trust their direction and keep the following things in mind: overall projected value of the home vs. its list price, upgrade needs, resale potential and schools.
In a hot market, it pays to be first. See the home as soon as it is listed. That way, your bid might pre-empt later offers. Keep your offer simple and flexible. Don’t bog it down with contingencies and demands that will inconvenience the seller. You can also offer a flexible closing timeline, which can tempt sellers who need time to move out or those who want to be rid of an empty home quickly.
Another option that has worked out well for some buyers is to appeal to the sellers with a personal touch. Write a short, transparent letter about how much you love the home and let your realtor pass it along. If you emphasize your appreciation for the work that’s been put into the property and let the owners know how well it fits your lifestyle and future plans, it could put you over the top.
This is the most money you will spend in the quickest amount of time, so don’t make a move unless you feel completely prepared to own the home in question. If you feel uncomfortable bidding higher, walk away. There will always be other homes in the future.
And if you lose a bidding war, don’t count yourself out. Another buyer may bid too high and the deal could fall apart on appraisal. Have your agent keep an eye on the listing if you’re still interested.
Check out all of our posts in our home buying and selling series!
The blog and its opinions are expressly that of its author and does not convey the opinions or strategies of the Credit Union and should not be considered financial advice. CommunityAmerica’s Mortgage offers are subject to credit approval and terms may vary based on conditions.