22 Oct Win A Bidding War: How to Get The House You Want?
real estate agent
A scenario that is becoming more and more popular in the southern Ontario real-estate market is potential home buyers finding the home of their dreams, only to find out several others felt the same way and now they are in a bidding war. Unfortunately, only one person can come up with the winning bid, and it is not unheard of to be involved in several bids to not end up with the winning bid in any of them. If you are searching for the best strategy to win a bidding war, read the tips we highlighted below to help equip yourself adequately to win the next bidding war ahead of other buyers.
It is good to know that bidding wars are common in a seller’s market, however, working with an experienced and knowing the winning strategy is the best way to ensure you have the best chances at getting your dream home.
1. Get a Pre-Approval Letter
The impact of getting pre-approved for a mortgage before you start searching for your dream home cannot be overemphasized. A pre-approval letter shows that you have succeeded in the pre-qualification process regarding your loan application for your dream home. It usually indicates the mortgage amount you are qualified for. A pre-approval letter shows the seller that you are serious and ready to buy their home.
2. Propose the Highest Offer
Tactically, the most effective way of winning a bidding war is to offer the most money. Regardless of other factors that the seller may consider, money can sway just about anyone. However, you must keep in mind your budget and your pre-approval. Knowing when to walk away and avoiding emotional decisions will help you during the process. If you cannot afford to come over the top of the existing high offer, keep looking as there are bound to be other options out there for you. Avoid putting yourself in an awkward position, where you can’t back an offer.
Working with an experienced real estate agent will help you come up with what your offer should be as well as potentially help you find out how much other potential buyers have offered.
3. Add an Escalation Clause
Adding an escalation clause to your offer will give you an edge over the competition up to the amount indicated in the offer. If there are higher offers than your initial offer, the clause will give you an advantage, as long as the highest offer from the competition is below the amount in the escalation clause.
4. Offer to Pay in Cash
Sellers cannot resist selling to the buyer that offers to pay in cash. If you can pay in cash, you stand a better chance because the seller will not be bothered about your financing and other issues. You can close the deal faster. Take advantage of a cash offer to win the bidding war.
5. Exclude the Contingencies
Avoid including conditions that can delay closing the deal. Sellers do not like conditions that can make them end up re-listing their properties. Drop all the specific conditions that must be met before you can complete the sale to fast-track the closure of the deal. Just a warning here, this can put you in a position where you forgo inspections that may uncover a potential issue or expensive repairs.
Find a reputable real estate agent to work with you if you want to find your dream home, not only will they help you win a bidding war if you find yourself in one, they will find potential homes that will meet your needs and budget.