Are you trying to buy a home in a highly competitive market? If that’s the case, you will likely find yourself in a bidding war with other buyers who want the very same home. In a seller’s market bidding wars are quite common, and for everyone involved it can be extremely stressful. This article is going to discuss four ways for you to come out on top in a bidding war without offering more than your loan approval will allow.
Price is Not the Only Consideration
The main thing to understand is that although price is important, it is not the only consideration for sellers when choosing to accept an offer. Truthfully, many sellers consider price secondary to a number of other factors.
For example, when you are making an offer, you should consider whether the sellers are in a rush to close. Find out if they are relocating for a job in a different city or state, or if they have already purchased another home and need to quickly unload this one. If so, they will likely want a quick close. Make sure you have a preapproval letter for your financing and your documentation in order, so that you can promise a faster close than others who may also be making offers.
Have a Friendly Face-to-Face Chat with The Listing Agent
Spend a little time forming a cordial relationship with the seller’s Realtor to see if you can find out why they’re selling their home. Are they relocating? Do they need the money? Are they facing foreclosure or some other pressure? Are they selling to upgrade to a larger home? Any of these factors could be used to benefit you in a bidding war.
Also, see if you can find out whether the sellers already have a place they’re moving to once their home is sold. There is always a chance that they would like to remain in the house for a period of time after closing. If so, and your offer includes leasing the house back to them, that may be enough to sway them in your direction.
Make it Personal for the Seller
From the seller’s perspective, a bidding war can be exhilarating. They feel like their home is a hot item on the market and is bound to secure an offer when the dust settles. With that said, choosing a buyer under those circumstances, can be difficult when faced with multiple similar offers. Help your offer stand out by writing a personal letter and submitting it with your offer.
Tell the seller a bit about you and your family and let them know why this house is special to you. Paint a picture for them of how you intend to build memories in the home. A letter like this can help personalize the process in what is otherwise a cold business transaction for the seller. It may help them to become as personally invested in selling you the home as you are to buy it.
Be Flexible, But Remain Firm
Last but not least, it always pays to show a certain amount of flexibility in a bidding war, while staying firm. However, adjusting your terms or offer too much is not in your best interest. If you make a great offer and you still end up losing the bidding war, well that’s just the way it goes. Put the experience behind you and go out and find another home to buy.
In a hot property market, it makes sense to mentally prepare yourself for a bidding war each time you present an offer. For more ideas or for help determining how much financing you qualify for, give us a call today. Our team of mortgage professionals will be happy to schedule a meeting and explain how you can buy the house or condo of your dreams.