Tips to win a bidding war
In seller’s markets, when demand is high and inventory is low, buyers often have to go above and beyond to make sure their offer stands out from the competition. In fact, 54% of Redfin offers nationwide encountered bidding wars in July, marking the third month in a row where more than half of Redfin home offers faced competition.1
While there’s no science behind winning a bidding war on a house, there are things that you can do to increase your chances. Here’s what you can do as a buyer in a seller’s market.
Work With a Great Real Estate Agent
The most important thing that you can do is work with a great real estate agent. You want to make sure that you work with someone that is an agent full time, understands the local market, and has the experience to help you make a strategic, winning offer. If you are already working with a Guaranteed Rate Affinity Loan Officer, ask them for a recommendation.
Up Your Offer
There are several factors that play into who wins a house, but offering the most money for the house is a winning strategy, as most sellers want to receive the highest amount of money for their house. Before you increase your offer, there are a couple of steps you should take. First, talk to your Loan Officer about how upping your offer will impact your monthly payment. Second, consult with your real estate agent to make sure you’re not overpaying for a house. Your agent will be able to compare the house to home values and recent sales in the area.
Be Prepared and Fully Pre-Approved
Sellers want offers that will not fall through, so it is imperative that you are fully pre-approved before making your offer. A pre-approval can be done over the phone with your Loan Officer or digitally through an online application.
Contingencies are certain things that must be met in order to close a deal on a property. If they’re not met, the buyer is allowed to back out without losing any money. In a seller’s market, you’ll see an increase in waived contingencies so as a buyer you should understand what these mean and talk to your real estate agent and lender to see if any of these make sense for the property you are buying. For example, if you’re thinking about waiving inspection, get a pre-inspection done at the time of the open house.
Button Up Your Dates
Find out what is important to the seller in terms of time frames. Some sellers want to close quickly. Others want more time. They made need to find another house themselves, or they may not be ready to pack up and move just yet. Have your real estate agent find out what time frames work best for the seller and tailor your offer to their needs.
Write a Personal Letter
If you love a property, let the seller know in a letter. Be open and honest regarding why you feel so strongly about their home and why you think you’re the right buyer for it. Many people have an emotional attachment to their homes and want to make sure the new owners will take care of it and love the home as much as they do.