Posted on: 30 June 2021
So you have found what seems to be the perfect house, and you have put in a great offer—only to find out that someone else feels the exact same way that you do. This is very common in a flooded real estate market when the inventory is low and the demand is high, which often leads to bidding wars. A bidding war simply means that sellers receive multiple offers in a short period of time. This is great for the seller, but it isn't so great for you and the other buyers. Sellers get to sit around and wait for buyers to sweeten the deal. However, you are left to stress out and are more likely to pay more than you anticipated for the home that you want. Here are a few tips to help you win that war and land the home you want.
Get a Pre-Approval
If you are serious about purchasing a home, you should get pre-approved for a loan by a lender before touring homes. You will receive a pre-approval letter from the lender which you can provide to the home seller and his or her agent that shows you can afford the home, which minimizes the risk of the mortgage financing falling through during the closing process. Without a pre-approval letter, the seller could potentially pass you over for another buyer who has one.
Offer All Cash If Possible
Now, this is not an option that everyone can do, but if possible, give an all-cash offer on the home that you would like to buy. More often than not, this is going to send you directly to the top of the list. One reason for this is because the seller is going to know you are serious about buying, and the seller will not need to worry about your financing falling through later on. Plus, a cash sale is going to save both of you considerable time through the sale process since it cuts out the underwriting.
Drop the Contingencies
If you want to figure out a way to capture the attention of the seller without going over your budget, then you can create a more appealing offer by skipping your contingencies. These are conditions that must be met prior to the home sale going through. So, when you drop these, you are letting the seller know that you will cover the costs of something, even if it goes wrong. For instance, if there was a contingency that the house would sell if the appraisal came in at $250,000 and it only came in at $235,000, then you would still buy the home if you dropped the contingencies.
If you are ready to start looking at homes, or if you would like more information on how you can win a bidding war, contact a local real estate agent.Share