One of the defining features of the housing market the last several years has been the limited supply of available homes, which in turn has meant fierce bidding wars have often been the norm. While there has been encouraging news lately that more supply is finally starting to come online, the era of the hard-hitting bidding wars is still with us.
Over at Yahoo! Finance, they recently provided some excellent advice on how to come out on the winning end of these battles.
First, it is critical that you Come Prepared. This includes having pre-approval for a mortgage in-hand so sellers and listing agents know you can close on a loan quickly. You will also want to include documents that show you cover closing costs and the down payment. As Yahoo! notes, the goal is to convey “legitimacy and ease” to the seller.
Second, if at all possible, make an All-Cash Offer. This will give you a big advantage in a bidding war. With an all-cash offer, sellers do not have to deal with things like the mortgage process and underwriting approval. Additionally, it relieves the fear of the buyer’s financing falling through.
Thirdly, Yahoo! Finance recommends to Be Careful With Contingencies. Things like making the sale contingent on an appraisal, or on the buyer’s ability to sell their current home, can all be seen as potential deal-killers by the seller. This could put your offer down the list.
Next, you want to make sure and Sell Yourself. While home buying is largely an anonymous process, some agents suggest to their clients to send a personal note to the seller describing what they love about the house and what they plan to do with it once in their hands. Even with a less competitive offer, this simple step can be something that turns things into your favor.
Finally, you want to leave the bidding process with No Regrets. You want to put your best foot forward and give yourself your best chance to win in a bidding war in all aspect. However, you also don’t want to later regret overpaying by $20,000. By following these steps, you will leave with no regrets either way.