How to Win a Real Estate Bidding War

So you’ve done it. You’ve found the home of your dreams. It’s perfect and everything you ever wanted. Except there’s just one problem. Someone else feels exactly the same way. And when you make an offer, they do as well, escalating a bidding war.

In fact, sometimes it’s not just one other person or couple. Sometimes, in particularly competitive real estate areas where the markets are hot and homes are in-demand, you could be competing with dozens of other people or even investors. Getting embroiled in a bidding war doesn’t necessarily mean that you’ll miss out on the home, but it does test the limits of what you want to pay for it.

So how can you win out over the competition? Let’s take a closer look:

Increase the Amount of Your Down Payment or Earnest Money

This strategy, in essence, forces you to put your money where your mouth is. In terms of an earnest money deposit, it shows that you’re very serious about buying their home. Investors tend to flock from home to home just looking for deals, so they may not be as willing to demonstrate such a hardcore intent to purchase as you are. This tells the seller that you’re putting money on the line to prove your interest in buying their home.

Waive Contingencies to Make Your Offer Irresistible

This is not a step you want to take lightly, but it is by far the most convincing way to show the seller that you mean business. When you waive contingencies, it means that you’re committed to buying the house regardless. There are different contingencies that can be involved. For example, waiving the financial contingency means that your offer isn’t hanging up on your approval for a home loan. 

Waving the inspection contingency means you don’t want to wait for the house to pass an inspection before you buy it. Oftentimes, a buyer will have an inspection done and then request that the seller make certain repairs before they buy it, so this is not a step that you want to skip unless you’re absolutely certain that you know what you’re doing! With that in mind, however, it is a definite way to put your offer ahead of the pack!

Offer More Money and Show Your Pre-approval Letter

In the process of getting home loans, a pre-approval letter says that you are approved for financing, how much, and at what interest rate. It’s a good way to put confidence behind your offer. You can tell your home loans specialist that you’d like your pre-approval letter to include other details to demonstrate your seriousness about purchasing, including things like your credit score or employment history. Although those aren’t necessary, they can show the seller that you are financially responsible and further committed to making a purchase.

You can also outright offer more money to the seller, but be sure to tell your home loan specialist or mortgage lender that you are doing so, because you’ll likely have to pay out of pocket for any amount that isn’t already pre-approved! You can also ask your agent to offer up to a certain amount. This is the real estate equivalent of “not showing all your cards”, and not revealing the maximum that you’re willing to pay when you immediately make a counter offer.

Rely on Your Agent

Last, but certainly not least, your real estate agent should be able to help you negotiate with a few proven strategies. They know the market, the area, and perhaps even the sellers themselves, so they may be able to give you an inside track on how best to approach the situation so that your bid stands out and gets selected!

Of course, none of these things are possible unless you have a solid, reliable and strong home loan. The home loans landscape can be likewise very competitive and it can be hard to know what you’re really getting yourself into without a knowledgeable, understanding home loan professional to guide you. Fortunately, we can help. Give us a call at (855) 225-2345 today to learn more about your home loan options and get started toward owning the home of your dreams! For more information visit our website at www.statedincomeloans.mortgage/

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