A Guide to Surviving a Bidding War
You just found a property you love. It has all the amenities you ever wanted. You prepare an offer a seller couldn’t possibly refuse. But just as your offer lands on the listing agent’s desk, several other offers come in to derail your expectations.
A bidding war has just begun and you find yourself in a tough position to negotiate for better terms.
Sellers love bidding wars, but buyers abhor them. That’s because a bidding war will put you at a disadvantage in coming up with an attractive deal. Normally, sellers expect a higher price for their properties, so buyers will have no choice but to scale their offers down in order to compete.
A bidding war is definitely not the right venue for purchasing a home for the best value. There are, however, numerous strategies you can apply for winning a war.
It’s not all about prices
Buyers would often assume that bidding wars are always about who gets to have the best price. This isn’t always the case. There are sellers who focus more on getting the best possible terms. They want a closed deal more than anything else. But other than that, they want offers to align with their current needs. That said, build an offer around the seller’s expectations rather than focus on the price.
Knowledge is the key to protecting your interests at the negotiating table. Being equipped with the facts should help you make better choices. Working closely with your realtor can help reduce the risk of making ineffective and highly reckless decisions. Having the right amount of knowledge can also help you position your offer better.
Do your research
How many offers were made on the property? You need to know as you draft a better deal for the seller. Get as much information as you can about the market and the seller. On top of that, you also need to create an offer that considers the sellers’ socio-economic emotions. You might also learn how to leverage certain tools such as an escalation clause which puts a cap on how much you can bid.
Other strategies that work
Listed above are the most obvious approaches to winning a bidding war, but there are other great strategies that will surely work for a lot of homebuyers in north Texas.
For one, you have the option of paying all-cash to motivate a seller to zero in on closing the deal. The rationale behind this is that third-party financing makes the transaction all the more tedious. Paying in cash bypasses the mortgage process and gives the seller access to cash which can be readily used for other investments.
Another strategy that grants you an edge over other buyers is to draft out a provision showing that you’re still willing to purchase the property regardless of the results of an inspection. This indicates how serious a buyer you are, ensuring the seller that any future negotiation will go seamlessly.
Bidding wars can last days or even weeks. You just have to learn how you can take advantage of a multiple bid situation and come out the victor. Then again, not many of these strategies can work out for the best on the side of buyers. There’s always the risk of compromising your own interests just so you could move in. You can win a bidding war and still lose in the long run. You need to work with a real estate professional to help you craft offers without jeopardizing your long-term goals.
With Arbrook Realty, we can help ease up the buying process. Contact us today so we can get you started on the right track towards your dream home.