Bidding wars are a trademark of a sellers market (like the current DMV market.) After countless hours of searching, you’ve finally found your dream home. You’re financially secure and ready to take the next step in buying a house. But if you’re searching for a home in a seller’s market, there’s one thing standing between you and the home of your dreams: other buyers. And now you find yourself in a bidding war.
Because of low inventory, you may find that your perfect home is perfect for many others. We’ll look at a five tips you can use in a bidding war to avoid heartbreak and ensure victory.
Get Pre-Approved
If paying all cash is not an option, you must get pre-approved for a mortgage before making an
offer. In fact, most agents won’t begin showing you homes and in many states you might not be
able to make an offer without being pre-approved with a lender. Be prepared early so you don’t
automatically count yourself out.
Be Flexible on the Move-In Date
First-time homebuyers and those who have already sold their previous home might be in a position to
be flexible with the sellers on their move-in date. A seller might ask for more time if they have
concerns about potential delays for a new home build. In this case, they could go through the closing
and then rent the home back from you for a few weeks or a month. This flexibility could be as
valuable—if not more valuable—than a higher bid on the house.
Up Your Earnest Money
In an aggressive seller’s market, many homes receive multiple offers from anxious buyers. Earnest
money, the deposit you put down on the home if your offer is accepted, shows the seller you’re
serious. If a seller has two competing offers to choose from, s/he may feel more secure going with
the offer that includes a larger deposit.
Communicate, Communicate, Communicate
In a competitive market where you aren’t the only offer, communication with the seller’s agent is
critical. Learn about the seller’s motivations and what factors are most important to them. The
ability to customize your offer to meet their situation is often a winning strategy!
Make it Your Best Offer
If you find yourself in a bidding war there’s a good chance the lowest offer will immediately be
trashed. And while some sellers might look forward to negotiating, many won’t or simply don’t have
the time. Make your offer stand out by keeping the terms simple and allowing your offer price do
the talking.
Remember every situation is unique. Contact the Jennifer Young Homes team to discuss your best
strategy if you find yourself in a bidding war.
