So, you’ve found yourself in the midst of a bidding war?
In today’s day and age, bidding wars are just another reality of purchasing property in a seller’s market. When a seller feels confident that their property will generate a lot of interest, they tend to take advantage of the market and underprice their home.
A house that typically sells free of conditions and with an elevated purchase price. This is what happens when multiple buyers find themselves to be bidding on a mutual property.
Fortunately, there are steps that any buyer can take to increase the appeal of their offer. If you’re buying in a red hot real estate market, this one’s for you. We’re uncovering five ways to make your offer stand out in a multiple offer scenario.
Offer a Competitive Price
First things first, it’s important to start it off with a bang.
Without a competitive purchase price, you’re offer isn’t going to stand a chance against the others. It’s also important to note the pricing strategy that comes alongside a bidding war. If the property in question is listed at $799K and has six offers, you know with certainty that the property is going to sell well above asking.
Remember, you might not get a chance to improve your offer. So, it’s best to start strong to avoid facing regret down the road.
Keep It Clean
When it comes to a bidding war, it’s essential to keep your offer as clean as possible. This means no home inspection clause, no necessary repairs and no financing clause. This allows your offer to be as enticing to the seller as possible.
Of course, there is risk involved in following such a strategy. But, if you’re serious about making this house your home, you’re likely going to have to take this route.
At the end of the day, the seller wants to accept an offer that is as simple and binding as possible. The goal is to avoid the offer falling through in the near future because of issues with financing or issues with the home inspection.
Have Your Deposit Herewith
In general, most sellers will require their buyers to have a deposit between 3-5% of the asking price. In the event of a bidding war, you’re going to want to have a healthy deposit that is readily available with your offer.
When submitting online, be sure to attach a photocopy of your deposit cheque. When in-person, have the deposit cheque readily available to hand to the seller in the event that they accept your offer. Once the seller receives the deposit and an offer free of conditions, the deal is firm.
Offer Possession ASAP
Before submitting an offer, be sure to inquire with the seller as to their preferred closing date. For the right place, you’re going to have to be willing to move at any time.
This could be anywhere from two weeks if the property is vacant to several months if the sellers have yet to purchase a new property. Either way, the seller will dictate their preferred closing date and it’s your job to abide by that closing date.
Short and simple: When the seller says “jump” it’s your job to ask “how high”.
At the end of the day, sellers are focused primarily on the numbers.
In a multiple offer scenario, the vast majority of sellers are going to select the offer with the highest purchase price. But, it’s always worthwhile to try to appeal to the sellers on a personal level. Remember, some sellers are more emotionally attached to their homes and are genuinely invested in who is going to be moving into their home.
In these circumstances, it never hurts to include a personal letter and even a photo with your offer. This can provide the sellers with a brief glimpse into who you are and why their home resonated with you. In the event of an emotional move, it’s not uncommon for sellers to care about the future of their once-home and who will be living in it.
Now It’s Time to Go for It!
Of course, there’s no one way to guarantee that you’re going to be the chosen one in a bidding war. In many cases, there’s always someone that’s willing to pay more and to go that extra mile.
But, this doesn’t mean that you can’t do everything possible to give it your best shot. When the next bidding war presents itself, be sure to use these five steps to make your offer to most powerful offer that it can be.
Find a home worth fighting for on Nobul.com today.