6 Key Steps to Outbidding the Competition.
Simply put, there’s a lot more buyers than sellers right now. If you get caught up in a bidding war, use the tips below to increase your chances of closing the deal on your dream home.
1. Choose the best lender
This is all about knowing where you stand. Research multiple lenders to find the most favorable terms and conditions when being approved for a home loan. Sellers expect buyers to be pre-approved for loan amounts that exceed the sales price of the home.
Homes are selling in Massachusetts for more than $100,000 over the original list price, so your first offer should include as much wiggle room as possible – that way you’ll be prepared for a bidding war.
2. Identify the right real estate agent
Not just any agent will do. The best agents leverage technology to identify trends in real estate transactions by region. They’re also connected to a powerful network of architects, designers, lawyers and other specialists who can help you along the way.
3. Write up a winning offer
Your carefully vetted agent will provide you with an analysis of completed home sale prices for similar models which you can use to guide you in deciding what amount to offer.
This comparative analysis can even be justified as a reason why your offer might be less than what the seller is requesting. Including a copy of the comparative analysis with a letter to the seller is a non-confrontational way of explaining your decisions to offer less than the asking price.
4. Take the right stance
If a bidding war ensues, you’ll want to consider the maximum amount you can bid on any home and stick to it. This number should also account for any funds you’ll need, beyond purchasing the home, to pay for repairs or enhancements.
Another scenario that requires careful deliberation is if the seller requires the buyer to make concessions such as foregoing a home inspection. This is a risky move for buyers because a home inspection can uncover issues requiring major repairs that could otherwise affect the sales price.
5. Make a meaningful connection with the seller
It’s important for potential buyers to be careful when giving feedback about the home they want to buy. If the house ends up in a bidding war, sellers are unlikely to choose someone who has nitpicked every detail or been generally critical of the home.
Sellers want to know their house will go to a person or family who will cherish the new property, so it’s critical for potential buyers to be seen in a positive light.
6. Close the gap
If you follow all of these steps, you’re much more likely to come out on top in a bidding war. And in today’s market, the lack of available homes makes it even more important to do so.