If you are in the process of looking for a new home, you’ve already experienced today’s hot housing market first hand. Desirable homes that are listed just a few days will have several offers, and the bidding wars ensue. Some of our clients are suddenly finding themselves out-bid in a bidding war and losing their dream home or finding themselves bidding more than they are able to afford. Has this happened to you too?
Bidding wars are a crucial part of today’s housing market, and that is why for today’s blog, we asked the real estate experts at AQRE Home to put together their top 11 bidding war tips to ensure you get your property without breaking through your approved mortgage amount:
Tip 1. Find your mortgage approval amount beforehand
A bidding war is a tough environment without a lot of time to sift through the details. So talk to your mortgage lender beforehand to figure out what your mortgage approval amount is and whether bidding on this home will exceed it.
If you don’t have a mortgage lender, our partners at AQRE Lending will be more than happy to offer you this advice and provide a quick quote for what you can afford.
Tip 2. Know your limit, stay within it
Once you know the upper limit of what you can afford, it shouldn’t be hard to tell early on if bidding significantly above your limit is necessary. Participating in bidding wars only when you have the money for it will save you time and ensure you get the best deal possible on your home.
And if you find yourself outbid, don’t be pressured into bidding higher than what is available to you. This way, you can avoid bidding more than you can afford, and losing your dream home even if your offer gets accepted.
Tip 3. Price is important, but it’s not everything
Price is an important consideration to keep in mind, but it isn’t the sole consideration that sellers make when deciding which offer to choose. In fact, for many home sellers, the price is secondary to a variety of other factors.
Tip 4. Focus on time over money
For many sellers, time is more important than money. Perhaps they are moving to a new city, or have already bought a new house and are looking to get out of their old one. If you have your mortgage financing pre-approved and your paperwork in order, you can promise a shorter close than other buyers may be able to provide, giving you an advantage.
Tip 5. Add a Purchase Guarantee to your offer
The housing market isn’t easy for sellers either. Sometimes, sellers have offers on their home rescinded by buyers, leading to wasted time and frustration. That’s why many sellers can be inclined to accept a lower offer if it comes with a purchase guarantee or a deposit. Adding this detail to your offer can make all the difference to the seller.
Tip 6. Knowledge is power
You can gain an advantage when bidding on a home by researching specific details about potential issues with the house, or about the financial situation of the current owner.
Public records like property tax records, title transfers, and inspections can give you vital insights for bidding on a new home. For example, if the property owner is behind on their taxes, they will be more motivated to sell, and accept a lower offer.
Tip 7. Ask your Agent for their insight
If you have a real estate agent representing you, they likely already know the details of every other offer, and the seller’s personal interests and desires for the future of their home. As your eyes and ears, they’ll be able to give you an accurate estimate of where the bidding war is headed and how to position your own offer.
Tip 8. Appeal to the seller’s personal interests to end the bidding war before it even starts
And don’t forget to talk to your agent to learn about the seller’s genuine requirements and desires so you can make an offer that is tailored to their interests. If you can satisfy straightforward demands, such as keeping their appliances or not replacing the original hardwood floors, your offer will be more appealing. Adding concessions into the proposal to give the seller what they want can help you win the bidding war, sometimes before it even starts.
Tip 9. Talk to the seller (if you can)
In many cases, it can help to present your case directly to the home seller. This is easier with properties that are for-sale-by-owner, such as those on AQRE Home’s platform, but others will be trickier as most sellers use intermediaries to communicate on their behalf for any negotiations.
A face-to-face meeting with the seller to personally state your objectives for acquiring their property may, however, put the odds in your favor if you can do it.
Tip 10. Write a personal letter to set yourself apart
A personal real estate offer letter may help earn you enough goodwill to get on top in a bidding battle if you can genuinely communicate your love for the home and how excited you are about the possibility of living it in with your family. It might just be enough to tip the scales in your favor during a bidding war.
Tip 11. Be Flexible, But Be Firm
Finally, keep in mind that you will need to be flexible to win a bidding war, but you should remain firm. Don’t bend your offer or terms too much. If you table a great offer and still lose the bidding war, that’s life. You can always find another great home to live in, like the hundreds of properties on offer on AQRE Home.
If you’re looking for tips on how to buy a property in this difficult housing market, other articles written by our real estate experts can help.
And if you’re ready to start the search for your next property, visit AQRE Home! With a multitude of filters, locations, seller chat, and payment options, it’s never been easier to buy your home at the price you want.