You’ve found the house of your dreams, and are prepared to put in an offer on it. But so are a bunch of other home-buyer hopefuls. The result? A bidding war. While this puts the sellers in the driver’s seat, it forces buyers to get ready for battle. Unfortunately, bidding wars on properties in desirable neighborhoods are common, and are here to stay.
Here are some tips to prepare you for a nasty bidding war to help you come out victorious.
Go in There With Your Best Offer
Forget about playing the back-and-forth game that comes with a typical real estate offer. You know the drill – buyer puts in an offer, seller signs back with a higher price, then buyer comes back with a slightly higher number, and so on. When it comes to a multiple offer situation, you need to come in with your best shot, and that means offering them the highest amount you’re willing to pay for the house. There’s little negotiating room here. If you’re competing with other offers, you want to make sure your offer stands out, and that starts with a desirable offer price.
Get Your Financing in Order Beforehand
When sellers have a bunch of offers on the table, they’re more likely to pick the one that doesn’t require a waiting period to see of a particular buyer can get approved for a mortgage. Instead, they want to see buyers who already have their finances lined up in advance so the process can proceed as quickly as possible. Having your financing ready can help reassure sellers that you’re financially capable of closing the deal.
Offer a Sizeable Down Payment
Show the sellers the money and put in as much as you can afford towards the down payment. The bigger, the better. Putting a big chunk of change as a down payment will give the sellers more assurance that you’re able to follow through with the deal. There’s nothing that speaks louder than cold, hard cash when it comes to grabbing a seller’s attention. Including a large down payment with your offer will help put you in the spotlight, and give you a leg up on the competition. Just make sure you’re good for the money – you don’t want to make an offer that you’re not comfortable with, or one that will put you in financial distress.
Limit the Conditions
Ideally, sellers like to see an offer come in with zero conditions. Basically, once the agreement is signed by both parties, it’s a done deal. There are no clauses keeping the deal open that need to be dealt with before the offer is complete. Financing or inspection contingencies in particular can make sellers nervous about any possible delays, so if possible, avoid these conditions if you can. The cleaner the offer, the better in a multiple offer situation. However, make sure that you’re not eliminating anything that you strongly feel could put you in hot water.
Come Prepared With a Certified Check
A deposit is always part of an offer. The digger you deep into your pockets, the better off you’ll be in a bidding war. Not only should you offer a hefty deposit, but you should also show up to the offer presentation with a certified check in your hands, ready to be deposited by the seller. The deposit will be going towards your down payment anyway, and you’ll get it back if your offer is rejected. A clean, attractive offer with a large deposit in the form of a certified check can put you in the winning seat in a bidding war.
As always, having a skilled realtor on your team can help you maximize your chances of winning a bidding war. This scenario isn’t exactly enjoyable for buyers, but with the right teammates and a well-prepared offer, you stand a very good chance of landing the home of your dreams.