I’ve been hearing of buyers and sellers who don’t even want to enter the market because they’re afraid of the competition that comes with the frequent bidding wars we see in our market. Today I’m here to say that you don’t have to be afraid of bidding wars, and there are ways you can win them. Occasionally one of our buyers will lose a bidding war to a cash buyer, but most of the time, they come out on top. Here are my tips to help you find success in our competitive market:
1. Work with an experienced agent who can offer a proven strategy.
2. Make a good offer. In this market, you should offer full price or more; in most bidding wars that I’m seeing, homes are selling between $10,000 and $20,000 over list price.
3. Shorten your timelines. Having shorter timelines in your contract can make a seller very happy and more likely to accept your offer over others who haven’t shortened theirs.
4. Ask the seller for as few closing costs as possible. Sometimes buyers ask the sellers to pay some of their closing costs, but sellers have their own, as well. Buyers who ask too much in this regard rarely win bidding wars. If you need closing costs assistance, then apply for a down payment assistance program, or get gift funds from family.
5. Write a personal letter to go with your offer. Include a picture of you and your family (as well as any pets) and let the seller know why their house is perfect for your family. Sellers love these kinds of letters, and sometimes they can even make the difference between getting accepted or rejected.
6. Offer to pay some of the seller’s fees. If you make an offer above full price but the house doesn’t appraise, the seller has to come down some. The seller will be happier with your offer in that scenario because you’ll be paying some of their fees, allowing them to net more.
7. Send the sellers a comparative net sheet of all their offers. Some sellers don’t even know what the offer is going to net them because their agent doesn’t know how to do net sheets (or doesn’t do them well). Have your agent send over a net sheet that shows them how much your offer will net them now as well as what it would net if their home didn’t appraise.
These tips will help you give your offer a competitive edge in this market. If you’re trying to avoid a bidding war, look at houses that have been on the market for 10 to 14 days; they could still end up with multiple offers, but it’s not likely to get out of hand. If you can afford to pay your closing costs, then I encourage you to go in guns blazing with an offer that no one can beat.
If we can help you come up with a strategy based on your situation, reach out to us. We love working with buyers and sellers, and we’d be happy to help.
