Real estate biddings aren't for the wimp. It is a competitive market out there so you have to make yourself more appealing and able compete even with all-cash offers.
These 7 effective strategies to win a bidding war by Trulia will enable you to become a desirable buyer, the type who finishes triumphant in a multiple-offer war.
Get preapproved
Sellers are almost always prioritizing those who have mortgage preapproval when several offers come their way. It is safe to say that they lean towards those with verified income and credit score as these are buyers who are determined to afford payments on a mortgage. If you are preapproved, you gain that edge that makes you ahead of everyone else.
Have at least 20% downpayment
You will surely sweeten a deal by laying an all-cash offer on the table. Sellers find buyers more desirable if they at least put 20% downpayment (or more if you can) as this means that the sale is less likely to fall through.
Have all your paperwork in order
Let a seller know that you're serious by showing up ready when you submit your offer. Don't wait for them to ask you and instead prepare your proof of fund documents and other real estate documents necessary beforehand.
Forget lowball offers
If you really like a property, don't risk holding back on your offer hoping to sweeten the deal with a higher offer on the second try - you may lose the property to another buyer if you do this! Think that you only got one chance so lay your best offer on the table and increase your chance of winning the bidding war.
Keep contingencies reasonable
It is not always a wise thing for a buyer to drop all contingencies as other people would advise. While sellers find offers with no contingencies more attractive, you can't take that big risk of losing your protection should you decide to cancel your offer.
Lay a financing contingency on the table and pair it with preapproval and a strong earnest money deposit. Consider a home-inspection contingency but let sellers know of your time span to get it done. Doing that could save you should you decide to cancel when the cost of repairs goes out of hand but not tie the property for too long.
Include an escalator clause
To ensure that you keep the property on your team in a bidding war, consider doing an escalator clause. This technique simply means putting in contract that you agree to increase your offer for $1,000, $5,000, or $10,000 more than any higher offer submitted. Just put a cap on the total amount to stay within your budget.
Write a love letter to the sellers
You can actually write a seller a letter, especially if you haven't met them yet. Gayle Henderson, a Re/Max agent suggests these key points worth mentioning: "We're relocating from ...," "We see ourselves living in your neighborhood or chose your schools because ...," "We especially love ...," and "We appreciate your accommodating our visits."
You can take that a notch higher by including why you are the perfect candidate as the new owner of the new house.
