Bidding Wars – What You Need to Know

Question:

With the hot market right now I have heard that in some cases buyers may find themselves participating in a bidding war for the same property.  What is your strategy and how do you help buyers make the right move and not overspend?  

What are the key elements to writing a strong offer to help increase your buyer’s chances of buying the house with favorable terms? 

 

Answer:  Two excellent and timely questions.  After several years of buyers dictating terms, sellers are now finding buyers are being more aggressive.  And yes, it is now common to be in multi-offer situation.   My strategy for buyers is the same as Seahawk quarterback Russell Wilson—success comes from preparation.

When the right home, at the right price, comes on the market, quick decisions must be made.  The only way a buyer will be ready to make the right choice is to be prepared; and that takes work and effort. 

Market knowledge can be attained using the internet to study inventory and history, (what homes sold at what price over the last several months), and touring homes with a Realtor.  Many first time buyers will see dozens of homes to gain the knowledge they need to make a comfortable, competent decision.

Here, again, preparation can make the difference. Have in hand a Pre-Approval Letter from a reliable, recognizable lender. That tells the seller that you are a legitimate buyer. Pair that with a substantial earnest-money check—one that, again, shows you mean business. Here’s a tip that few people use—and I recommend to all of my buyers who might face a bidding war: Include a hand-written note to the seller.

Also, the offer terms should show some flexibility as to the closing date, Escrow Company, inspection, and other timeframes, as well as not being loaded up with unnecessary addendums.  The bigger the down payment the better and if you can pay all your own closing costs, great!

Most important to sellers is the ability and desire of the buyers to complete the transaction.  (It is usually 30 – 45 days after the offer is accepted to closing and many things can happen in that time span).  Your offer can stand out from the others if you are prepared to make it the best offer and easy for the sellers to accept.  Russell Wilson is right when he says, “The separation is in the preparation”.              

 

Posted on August 1, 2014 at 7:53 AM
Terry Burns | Category: Uncategorized

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