Coming Out on Top in Bidding Wars
When it comes to bidding wars, there are competitions to be won. If you find yourself in a bidding battle for a property you really want, you may want to check out the following tips to help with success.
One thing to start off doing is to go and get preapproved for a loan as soon as possible. In today’s mortgage market, sellers may tend to say away from loans that are not quit set in stone. The person who has proof of the necessary funding has the upper hand. If it is possible, bring cash. Sellers today are concerned about low appraisals and loans that are not closing. So, be sure to prepare in advance and get your finances in order.
When it is time to make your offer, come in confident, strong and try to be the first. In addition, do not insult the seller by lowballing. Offering an amount that is too low can offend the seller, because you are undervaluing something they place a high worth on. Suggesting a low amount can result in the seller’s dismissal of your offer right off the bat. In order to show that you are serious about the property, come in with a price that is just below or at asking price.
In bidding wars, it is additionally helpful to have a pre-inspection done. This can cost you, but you must think of the advantage. Do a pre-inspection before you submit your offer and sellers will likely react positively.
Also, use the escalation clause. This refers to the amount of money a buyer will increase an offer if other bids exist. Here’s how it works: if a house is listed for $300,000 and you predict that the price might go as high as $325,000, you can choose to use an escalation clause that states you will go as high as $335,000 or whatever amount you choose. Make sure you are specific, however. Be sure it is stated that the winning bid will be taken at an amount that is just above competing offers. So, if competitors are offering $315,000 at the highest, you should only have to pay $316,000 rather than $335,000.
In bidding wars it is additionally essential to show your passion for a house if you feel that way. If you love the property, ensure the seller knows. You may tell them directly or have your real estate agent do so. People commonly write letters that show dedication to owning the property. Take these steps into consideration for your next bidding battle to help you move to the top.