Wednesday, October 21, 2020 / by Sonya Reiselt
With the current climate in real estate, it’s no surprise that many listings end up in bidding wars between many potential buyers. With low inventory and high demand, this doesn’t seem like a situation that will change in the near future. Are you currently looking for your dream home? If your answer is “yes”, you’re going to want to make sure you are properly prepared for the potential of finding yourself in a bidding war. After all, if the house is perfect, you’re going to want to know all of your options to ensure your offer is the one that ultimately is accepted! Thankfully, there are many things you can do in order to feel confident going into a bidding war, and making sure you have a trusted realtor to guide you along the way, partnering with Sonya Reiselt, is the best first step to take! Here’s a rundown on the other steps to feel prepared:
1. Make sure you have all of your finances in order BEFORE making an offer.
· Start by getting pre-approved. This can be done even before you meet with a realtor.
If you find yourself in a bidding war with another buyer and you aren’t preapproved, you can essentially guarantee that your offer will be taken off of the table right away.
· Keep some money aside in case you need to up your earnest money. Showing the seller that you’re willing to put more money down could be a deal-breaker, in your favor. Often times, this will cause them to feel more confident going forward with your offer.
· Trust your realtor when they suggest where to start with an offer. Starting with an offer at the top of your budget won’t give you any room for wagering. This is why realtors will often give council regarding an amount they think you should offer. It should be a competitive amount but not necessarily the maximum that you’ve been approved for. If you find yourself in a bidding war, you’re going to want to make sure you have money left over to up your offer! To really ensure you’re prepared, sit down with your realtor, and prepare multiple contracts, each with an increasing offer. This way you’re already a step ahead when approached with a bidding war.
2. Allow the seller to know you beyond your offer letter.
· Write a personal letter to the seller telling them who you are and what their house would mean to you. Talk about the neighborhood, schools, and how you envision your children growing up in their home. Making these emotional connections can go a really long way.
· If you find an opportunity to meet the owners, do it! Putting a face to a name makes a stronger connection when they’re going over the various offers and letters presented to them.
3. Try your best to be patient.
· Give the seller time to go through their offers. If they give you a deadline regarding when they’ll have an answer, try not to panic if you don’t hear sooner.
· Make sure it is known that you’ll give them time to find their new home. It can be stressful for a seller in this market to sell their home while simultaneously coordinating buying and moving into another, all within a reasonable time frame for the buyer. The more flexible you are with their timeline, the more likely they’ll consider and accept your offer.
· This also applies to after your closing date. If they express that they might need more time, consider giving them a couple of days to move out and have the home cleaned after you close, without the need for compensation.
4. Consider removing some of your contingencies.
· This is often a hot-spot for sellers. If you’re willing to waive all or some, of the contingencies in your offer, it’s going to be very difficult for the seller to say no. (Keep in mind when waiving these that it is always best to continue with a home inspection, regardless of whether or it’s an official contingency!)
5. Prepare yourself, both mentally and financially, for counteroffers.
· This is often the hardest part to navigate! For starters, trust your realtor and always keep in mind the absolute maximum amount that you can afford. That number should never be topped. You can count on the fact that, even after your offer looks promising to be the final one standing, there will still be a counteroffer from the seller. Whether they are unwilling to repair issues found in the inspection, or they want the costs built into the sale of the home, it’s important to remember that you don’t have to accept these conditions if you don’t feel comfortable with them.
· A house can become less appealing once you get the results of the inspection and the following counters from the seller, and that’s OK! Financially, you don’t always have to pay for these repairs, and emotionally, it’s ok to decide the home may not be worth it. It’s all a part of the bidding war.
At the end of the process, what’s most important is that you, as a buyer, feel comfortable with how the process ended. Did you get your dream house with an offer that you are at peace with? Excellent! Did you lose out on the house either because the sellers didn’t choose your offer or because you couldn’t come to a mutual agreement? That’s ok! Even though it might not seem like it, there will be other houses and, unfortunately, other bidding wars. The good news? Your house is out there waiting for you, all you need is a trusted realtor and the wherewithal to outlast the competition!