Today’s real estate market is in the middle of the spring selling season, and many homes are receiving multiple offers very quickly. So how can you gain an advantage when the home you want has multiple offers? Here are six strategies that will give you an edge in a bidding war.
First and foremost, ask your real estate agent for advice! Good agents have knowledge of the market and selling season that can help you make an informed decision.
Sometimes, it’s best to play it safe and give the sellers what they’re asking for, either regarding price, closing deadlines, or both. Renegotiating prices too aggressively after an inspection can be a deal breaker, so ask your agent for their advice!
It’s not just enough to know for yourself that you can afford a home; you need to be able to prove it to others, too. Assembling a robust financial package is a key step in buying any home, but it is especially important when multiple offers are pending. Getting pre-approved for a loan will show that your finances are secure, and getting approval from an underwriter can lend extra credibility to your offer. If possible, pay cash!
If the home is being sold by a bank, it often sells to the first offer that comes in. But speed is important when you’re buying from the homeowners as well: it shows you are serious, and can create momentum in your favor before other offers come in. Once you’ve made your offer, go further! Include a copy of the earnest money check, and include a history of your agent’s deal timelines to show that the process will go quickly.
If you offer too low and get out-bid, you don’t want to regret that the offer you submitted wasn’t the best you could do. Conversely, you don’t want to over-bid with an offer that you might regret later. This is why it’s important to know the home’s condition and consider the current market value so you know when it’s best to walk away. It’s also a good reason to search for homes priced below your absolute maximum price limit, because you can counter-offer with confidence if you find yourself in a bidding war.
Nobody wins every bidding war! Take what you learn from a loss and add it to your bag of tricks for the next time.
Buyers, especially first time home buyers, seem to have a fear of making an offer on a home that they really like as they have this fear of buying the wrong house, maybe something better will come along. Through the home search buyers learn that new properties matching their search criteria come on the market every day, so how can buyers be sure that they have chosen the best home out there for their needs?
For one thing, most buyers have looked at many homes before they actually write up a purchase agreement. Buyers have learned that often what looks like the perfect house online is everything but perfect when they see it in person. Of the 13,000 or so homes currently on the market in the Twin Cities, you have chosen to look at a very small percentage of them that matched your search criteria and of those you have normally only chosen one to write a purchase agreement on. This alone should be a sign that homes that are right for you are few and far between.
What about missing out on a good deal? It is a fact that distressed homes are rapidly declining in the market and with the low home inventory, prices are on the rise for all homes. Even if you find a great home at a great price you will most likely end up in a multiple offer situation and would your offer be good enough to win the bidding war?
Better homes will always come on the market, meaning that there is no end to the problem of a possibly better home being out there. You need to make sure that the home you are making the offer on is a home that fits your criteria for the most part and that you will be happy living in. A home in not a life sentence! You can always choose to sell and move down the road if the situation is right.