Today’s housing market is marked by extraordinarily high demand for housing coupled with a record low supply of listings. With this comes bidding wars and fast-rising prices when a home comes on the market. To come out on top in a bidding war, you will need to be prepared, creative, and ready to compromise. Here are some tips for what you can do to sweeten the deal and edge out other potential buyers.
Get the Right Agent
Before you write any offers, consider hiring an experienced real estate agent. A professional agent can help you navigate the often-stressful process. Find someone who knows your local market thoroughly, has experience in multiple-offer situations, can explain things clearly, and whose advice you can trust at every step of the way.
Get a Pre-Approval Letter from Your Lender
Being pre-approved for a loan gives you a solid picture of how much you can put on the table and shows sellers that you’re committed to seeing the contract through. Also, consider providing more financial information, such as your credit score, your savings, and your length of employment.
Consider Waiving Unnecessary Contingencies
Buyers and sellers usually come to the table with a number of contingencies, which are conditions that must be met for a deal to be completed. Waiving unnecessary contingencies in a multi-bid situation shows just how badly you want to close the deal. Some contingencies, however, are very crucial as they give you wiggle room that you need as a buyer when it comes to negotiations with the seller. Discuss your contingencies with your real estate agent before making any bids.
Be Flexible on the Closing
For most sellers, the closing date will be a significant factor in their decision-making process. The majority of homeowners will want to sell and buy in the same general time frame. Find out the seller’s situation and be willing to be flexible with the closing date. For instance, letting the seller push back the closing date or rent back the home for some time could make you the front-runner in a multiple bid scenario.
Offer the Highest Price
In a hot market, many sellers want to get offers that are higher than the list price, especially if other homes in the neighborhood have been selling for 25% above listing. In such cases, many buyers have to go the extra mile for homes they love. You and your agent should conduct market research before bidding and offer to pay what you feel is fair.
While money is always going to the main deciding factor, sometimes a seller just wants to be assured that the buyer will take good care of the home they love. You can explain how the home will be ideal for your family or can compliment them on the landscaping or a recent renovation. It won’t always matter, but pulling on the heartstrings of the seller can sometimes mean more than the highest bid.
Up Your Earnest Money
Earnest money is the deposit paid by the buyer after their offer is accepted as a sign they’re serious about the purchase. While it’s not easy to shell out thousands of dollars without knowing if the deal will fall through, a seller may feel more secure with your offer when there are other competing offers. Earnest money is usually 1%-3% of the home’s price, but you can increase the amount if you really want the home.
In a home bidding war, it can be easy to get swept up in the emotion and neglect due diligence. It’s important, to be honest with yourself and avoid regret no matter what the outcome will be. Your realtor can help you make the right decisions and find the right home.
The Michael Stoltzfus Group is located in Lancaster, PA and serves the Lancaster County and Central Pennsylvania area. We work diligently to help home buyers and sellers like yourself achieve their home goals. With extensive experience and knowledge of the area, the real estate team at Michael Stoltzfus Group will provide friendly and professional support for your entire real estate transaction.
Contact us online where one of our professional team members will respond via email or call us today at 717-380-3367