Best Bidding War Tactics
Across the United States, real estate has become a hot commodity since the start of the pandemic. Interest rates are historically low as is inventory. This makes for a perfect situation for sellers, with homes for sale in Montgomery County typically receiving at least the asking price. In many situations, these actually spark a bidding war.
But how do you win these feuds for homes, especially if you are new to purchasing real estate? Consider these tips to be ready to win the perfect house when you find it.
Be Ready To Move Quickly
Speed is the name of the game in the current market. Homes are frequently listed and within hours have several pending offers. This is part of why working with a well-connected real estate agent is important. They have the heads-up on properties before they are actually listed, and can help you get a sense of whether that home may be the right one so you are ready to make a quick offer.
Get Mortgage Preapproval
It is surprising how few people actually get their mortgage preapproval before starting to look at homes. When you have a preapproval already in place, you are communicating to your agent and the seller that you are ready to make a move on a property, which accelerates the transaction speed for everyone.
Know Your Budget Range
When it comes to bidding wars, it can be very tempting to keep pushing your bid price higher. However, this is very dangerous because you can quickly exceed the limits of your budget. Know your top end, and shop below that, allowing you a little wiggle room to bid up if needed. However, be firm in how far you can go and do not attempt to exceed that limit.
Come With a Larger Down Payment
Most people know that larger down payments positively affect their mortgage terms. However, in a bidding war, it also reinforces your interest and shows a buyer you are able and ready to close a deal right now. Someone with the bare minimum can raise questions if they will get the financing, even if they have a preapproval.
Consider Fewer Contingencies
Contingencies are those things that can break a real estate deal, including the prepurchase inspection or final financing approval. This shows a seller you want the house, and are willing to take a risk to get it. Unfortunately, this also means you could be legally obligated to complete the purchase, even if something happens with your financing or an inspection turns up major issues. Be sure to talk with your real estate agent to determine if this is a good tactic for you.
Think About The Seller
Remember, a seller is a person with needs too. So, just because you are ready to move quickly, your seller may need time to move. If you can offer more flexibility than your competition, you may be able to win the bid, even if your offer is lower.