5 Dec
If you’ve found a house that feels like home, it can be discouraging to know that you’ll have to engage in a bidding war in order to secure the house of your dreams. Unfortunately, bidding wars not only involve a lot of luck but also commonly cause people to go over their budget. However, the good news is that if you know what you’re doing, you can easily win the bidding war without having to break the bank.
- Get pre-approved for a mortgage
When it comes to winning a bidding war, one of the most important things you can do is to get pre-approved for a loan by your mortgage company. There are several reasons for this. For one, it will allow you to know just how much you can offer. Second, it also shows the seller that you are serious about buying and can therefore give you the advantage over other bidders.
- Do your research
Figuring out the market value of the house you’re looking to buy by visiting real estate websites can be a useful way to figure out how much other bidders will offer so that you can at least match those other offers and maintain a competitive edge.
- Make your offer before the weekend open house competition
One way to win a bidding war is to avoid one in the first place. You’ll be able to do this if you make an offer before the seller has an open house. For example, if you look at a house on a Wednesday, you can make an offer by Thursday. Remember that there are no rules saying you can’t make an offer for a house before the official date.
- Offer to meet the homeowner’s ideal terms
If you know that the homeowner wants to sell the house by a certain date, you’ll have the advantage over other bidders if you can meet these ideal terms, even if other bids are higher.
- Offer slightly more than the asking price
If a house is for sale for $250,000, don’t overlook the power of increasing your offer to $251,250 even though it’s an uneven number. If you’re in a bidding war, always offer an amount slightly over the asking price. This will make your bid stand out from the rest and will give you the advantage – especially over other bidders who may have made an offer slightly below the asking price.
- Don’t add additional conditions or requests to your offer
Adding additional conditions to your offer can easily make you the loser in a bidding war. For example, you might tell the homeowners that you’ll buy their house as long as you sell your house first or you might make the purchase of the house contingent on being able to secure financing. Both of these conditions can deter the seller because your bid comes with additional hassles. This is especially true if another bidder is making them a clean offer without any additional requests. Making a clean offer, however, will increase the likelihood that you will win the war.
- Add Incentives to Your Offer
When it comes to winning a bidding war, it can be very advantageous to add incentives to your offer. For example, perhaps you could offer to buy a piece of heavy furniture that they don’t want the hassle of moving. Another potential incentive is to offer to pay the closing costs. While this last tip will involve tapping into your budget, it doesn’t necessarily mean that you will have to overextend yourself either.
- Establish a connection with the homeowner
You may be surprised to find that a seller might just take you up on your offer even if another bidder has offered more for the home if they happen to know you better. The key is to visit a home more than once to establish a connection with the seller.
- Don’t get caught up in a bidding war
When it comes to bidding wars, many people get caught up in the excitement of it all that they end up spending more for a house than they should have. When it comes to buying a home, don’t forget to assess the house by asking not what’s right but what is wrong. Do your research: look up crime rates, schools and so on. Also, ensure that you always set up a home inspection fund to ensure that you don’t purchase home with a roof that’s about to collapse.
Additional tips:
One of the most important things you can do to win a bidding war is to get pre-approved for a mortgage. If you’re looking to buy a home, Mortgages, Mortgages, has a range of mortgage options. Contact us today for more.