14 Tips to winning the bidding war for your dream home
2017 is going to be a frustrating market for many home buyers. The lack of inventory, and the high volume of home shoppers will be a simple recipe of supply and demand.
One thing to understand is that each listing agent handles the situation of multiple offers differently. Each multiple offer situation is different too, so their "normal" plan may be altered based on number of offers, or the drastic difference between one bid and another.
Here are some examples of what may happen in a multiple offer situation:
- The agent and sellers accepts the highest bid and reject the others.
- The agent and sellers make a counter offer to a single offer.
- The agent and sellers make a multiple counter offer with the same or different terms.
- The agent and sellers make a call for "Final & Best." Then accept the highest offer 24-48 hours later.
Now let's look at the 10 tips that may help make your offer stand out above the others.
- Make sure that your lender letter is not a generic Pre-qualification, but an actual qualified offer. Make sure that it states that credit, employment, down payment all have been reviewed.
- With your offer you should consider including copies of bank statement that show sufficient proof of your down payment and closing costs.
- Make sure that you have given your top bid the first time. There may not be a second chance to up your offer price, or change any terms.
- Consider including an addendum with your offer that states "Buyer is willing to bid $5,000 above verifiable highest and best offer." Please note that some states may not allow this.
- Although the state of California's Residential Purchase Agreement states that homes are purchased in an As-Is condition, it may be important to note that you intend to purchase the home "As-Is." This can be done in your initial offer, or by notating it in a "CA Request for Repairs" form.
- It may be a good idea to write a heart felt letter to the sellers sharing reasons why this is the home of your dreams. Photos are a nice touch.
- Consider making a larger deposit. This makes your offer look strong, and gives the sellers a sense of security. Since that money is going to go towards your down payment, why not!
- Allow the listing agent to pick their preferred title company. Although each title company has their own fees, the actual differences are generally very small.
- Shorten all of your contingencies - contract deadlines. By giving yourself a shorter deadline for inspections and disclosure, you give the sellers a sense that you are eager to get things done. It will also allow the sellers to know early on whether or not you are going to see this purchase to the end.
- Have your agent talk with the listing agent and ask about the needs of the sellers. Many sellers need time to find a new home, or close escrow on their home. It may make sense to allow the sellers to stay in the property for a short time. This can be done with a simple rent back, or at no cost at all! By allowing someone to stay for a couple of extra days can be the biggest factor in winning a bidding war.
- Don't ask for any personal property.
- Consider taking out the cost of the home warranty. If the seller doesn't have to pay for this they will generally see this as a win for them. Not asking for the seller to leave the refrigerator and washer/dryer can also be a big help in winning the bidding war.
- Consider paying for a few costs that the sellers would normally pay for. Paying for the entire escrow/title fee can be a huge difference to the seller!
- Write a clean offer. I know this sounds simple, but as a Realtor I HATE it when my top offer is written poorly. Make sure you have hired a seasoned agent who can explain ever part of the offer to you in detail. If your agent is a newer agent, make sure that they have had your offer reviewed by a mentor or broker before it is submitted.
By following these tips, you should have a much better chance at netting the home of your dreams! In a multiple offer situation the ultimate win is actually getting the home into contract. So, keep in mind that the little things don't matter. Don't let one little thing stop you! I have seen far too many people regret fighting over a few hundred dollar, or "the principle," and then regretting it days later.
ABOUT THE AUTHORS: THIS ARTICLE "14 Tips to winning the bidding war for your dream on" WAS PROVIDED BY GLENN TOMPKINS. A REALTOR IN THE SACRAMENTO AREA. MY TEAM OFFERS OVER 30 YEARS OF COMBINED EXPERIENCE, SO IF YOU’RE THINKING OF SELLING OR BUYING, I’D LOVE TO SHARE OUR KNOWLEDGE AND EXPERTISE.
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