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Buyer's Guide to a Bidding War
Bidding wars occur when housing inventory is low in a popular location. It occurs when two or more buyers are interested in the property. As a buyer, it's not advisable to rely solely on the seller's agent when you find yourself in a bidding war; you should have your own home-buying pro. Our real estate agents are ready to negotiate on your behalf to help you navigate this tricky process.
In today's competitive market, houses in all locations and price ranges are receiving multiple offers, and bidding wars are becoming a lot more frequent. Sometimes, a listing can be purposely underpriced to trigger a bidding war. One of the primary reasons longtime home searchers find it difficult to close on a home is because they end up outbid repeatedly.
So, how do you win a bidding war? Here are a few tactics to make your offer stand out.
- Have Your Preapproval in Hand Before You Start House Hunting
There are many benefits to getting preapproved for a mortgage. For one, you know how much you're allowed to borrow, so you can search for homes within your price range. Preapprovals also prove to sellers that you have the financing to afford their home. Considering most sellers won't entertain offers without proof of financing, you'll have a better chance of getting an offer accepted. - Make the Highest Offer
Money talks. Being willing to pay more money than other buyers is the best way to win a bidding war. Also, you can gain an edge over your competitors by upping your earnest money deposit. It'll show the seller that you're serious and intend to comply with the terms of the purchase and sale agreement.
That's not to say you should go beyond your budget. Finding a home in a seller's market can be stressful, and emotions can run high during a bidding war. Working with a real estate agent you trust means you can increase your offer without overpaying. Your agent can also use the local market balance to determine the best price to pay to help you secure your home and save some money in the process.
- Make Your Offer Personal
Sometimes, it's not just about the money. Selling a home is as big a step as buying one. Most sellers love the idea of passing their home to someone who will cherish it as much as they did. After all, homes hold memories.
A heartfelt letter to the seller detailing who you are and what buying their house means to you could considerably increase your chances of winning a bidding war. It leaves a lasting impression on the seller and doesn't cost a thing.
- Pay It All in Cash
Are you able to offer an all-cash offer? If so, you should do it. It's one of the best ways to get the seller's attention. An-all cash deal means they don't have to worry about you running into problems with financing. It also saves everyone time as it speeds up the closing process.
Here's a tip: Make sure to have the property inspected and appraised beforehand to avoid any after-purchase regrets.
- Drop the Contingencies
Stale listings attract fewer buyers and are likely to experience a price reduction. So, sellers don't want their homes to sit on the market for too long. They also don't want to have to go through the trouble of re-listing just because a contingency stopped a sale in its tracks.
Waiving some contingencies shows a seller that you're willing to move forward with the purchase. However, waiving the inspection contingency is never a good idea as you could end up paying a fortune in repair costs.
Work with the Right Real Estate Agent
Having an experienced real estate agent from Laffey Real Estate by your side is an invaluable asset in a seller's market. They can help reduce some of the stresses of buying a home and ensure a smoother closing process. Contact us to help you find your dream home on Long Island. We'd love to walk you through your home-buying journey.
