Bidding wars are very common in today’s real estate market. Here are some tips to help you beat out other buyers in your next bidding war:
Get an experienced agent
This will help you determine the actual market value of the property. Sometimes people underprice a homes in order to create a bidding war that will hopefully push the price above market value for the home. An experienced agent will ensure you do not overpay
Remove as many conditions as possible
The fewer the conditions the more attractive the offer to a potential seller. I have had sellers accept offers $5000-10,000 less than an offer with conditions because they wanted to know the house was sold that day and didn’t want the deal to potentially fall through on inspection or financing. If agents are withholding offers (discussed in the previous post- Read) then this will give you time to fulfill contingencies like financing and inspection and go in with a “cash” offer.
Make sure you agent presents in person
Your agent should present the offer in person and not simply fax or email the offer in. This allows your agent to give the sellers some background on their clients and also answer any questions they might have.
Set yourself apart
I have had client’s write personal notes with pictures of their family in order to set themselves apart when in a bidding war. It’s not always about the money- if the sellers have lived in the home for 30 years maybe it is more important that the next owners cares for and loves the home like they did- I have seen sellers accept lower bids because they thought a particular buyer was a better fit for their home based solely on their realtors explanation of them.
Try to meet as many of the sellers terms as possible. For example “closing date”- any good agent should try to determine the seller’s preferred closing date prior to drafting any offer. Chattels- try not to include chattels (appliances, furniture etc) that is not already listed in the inclusions section of the listing. Many deals fall apart over the smallest piece of furniture or some small chattel. If you like something in the home try to negotiate this as a side deal- keep it separate from the Agreement of Purchase and Sale
The bigger the deposit the better- this shows that you are serious about the property. Please note this money is cashed right after an accepted offer so it is important to have these fund available and accessible immediately.