Homes can be listed for sale and receive multiple offers within hours. Here are some ways to get the competitive edge that will help you win the home you want.
Great Strategies for Winning a Bidding War
Strong Financing: A seller is more likely to choose your offer when it has solid financing. You can pay all cash and waive all contingencies; however, if that is not for you then consider other strategies:
• Get pre-approved for a loan to prove your finances are solid.
• Work with a local lender or one preferred by the listing agent to gain an advantage.
• Get underwriter approval for an extra sign of strength as a buyer.
• Opt for conventional financing.
• Increase your earnest money amount.
• Ask your lender to call the listing agent and testify that your money is good.
• If the Appraisal comes in low and the lender balks, offer to borrow less to keep the deal together.
Present an offer thats hard to turn down: Matching what the seller desires in price, terms, and closing timeline will speak loudly when you make an offer. Your agent can help you find out which terms matter, including:
• Offer at list or, if the list price is low, offer at a price based on comparables.
• Shorten contingency periods or waive them altogether.
• Be flexible about the closing date, if that will win you an advantage.
• During negotiation, think carefully before renegotiating price or credits after an inspection (the seller might opt for the back-up offer).
3. Go the extra mile: Price and terms are one thing but you may be surprised to learn they don’t always win. When selling a foreclosure, banks sometimes choose the first offer that comes in; however, a homeowner might be swayed by a more personal touch.
• Move quickly to get the offer completed, so your agent can submit it by the offer deadline.
• Submit the offer fast so it’s on top of the stack or, if time allows, have your agent deliver it in person.
• Summarize key offer terms and highlight the ones that matter in a term sheet.
• Write a cover letter about yourself (with photos) and what you love about the home.
• Include a photocopy of the earnest money check to show you’re serious.
• Conclude with your agent’s deal history to show the escrow process will go off without a hitch.
Be fast, but don’t make decisions on a whim: Being prepared and having answers ahead of time means you’re ready to act fast with a quick decision or counter offer; it will also keep you from making an offer you might regret later. If you get out-bid, you want to be confident in the knowledge that you pushed to your limits but that the other buyer ultimately paid a price that doesn’t make sense for you.
• Consider what each price step-up should be in an escalation clause.
• Know the home’s condition, current market value, and the maximum you can afford so you
know when it is in your best interest to walk away.
• Search for homes priced below your max so you can comfortably counter.
Keep learning: Remember, almost no one wins the first time out and each multiple offer situation can be different. If you take what you learn from a loss, you can add it to your bag of tricks for the next time.
Check out this article on 7 Tips to Help a Buyer Win in a Multiple Offer Situation and this contrast video, Handling Multiple Offers From the Sellers Perspective.