With the real estate market finally recovering, some markets across the U.S. are seeing the return of the bidding war. While this is great news for sellers, it’s a source of stress for buyers who not only don’t want to overpay, but also may not have the flexibility to wait for the market to cool off. Here are some ways to win a bidding war without spending more than you’d planned.
Put your lender on speed dial.
Realtor Mary Ann Teixeira says winning a bidding war isn’t always about paying in all cash or even being the highest bidder; it’s about making your offer the most attractive one to the seller. And that starts by making sure you’re preapproved for a loan.Teixeira says that while an agent should never push a client toward a specific lender, she does have a few trusted lenders who will gladly accompany her when she makes an offer on a property for a buyer who happens to have borrowed from them.
“This is part of the strategy, because if there are any questions about the ability to get the loan, they can be addressed right then and there,” says Teixeira.
Present the offer in person.
Teixeira says you should expect your agent to literally go the extra mile to present your offer in person. “This helps convince the seller and his or her agent that the people on the other side of the table are serious and willing to do whatever it takes to make that deal goes through,” she says.
Consider waiving contingencies.
Teixeira says that in the San Francisco Bay Area, where she works, buyers need to waive contingencies to be competitive, as high demand and low supply have created a market where many offerings result in bidding wars. Waiving contingencies speeds the closing process and calms any nagging fears the seller may have that you’ll back out at the last minute.One contingency that often gets waived is the inspection, which can expose buyers to a significant amount of risk. This does not, however, mean that you’re going to buy the house without an inspection.
Julie Angelos of Berkshire Hathaway California Properties points out that in markets where multiple bidders abound, sellers will often hire an inspector to report on the house before it’s listed to help the house sell more quickly. They will then include both the inspection report and the disclosure agreement on the MLS so buyers’ agents can provide that information to their clients.
Teixeira says it’s important to read these documents carefully and have your agent call the inspector directly with any questions. If there’s enough time before the offer date, Teixeira suggests that you also hire your own inspector to look at the house before you make your offer. That way there’s no question about what you’re getting into.
Tailor your offer.
Tailoring your offer to the sellers can make it more attractive them. For instance, if the sellers are moving because of a job transfer on a certain date, you can put your offer together in a way that speeds closing or allows them to stay in the home until they find a place in their new city.
Adding a personal touch to your offer means you’re not just a name on a piece of paper, but a human being who loves and appreciates the home the seller has created. Consider enclosing a personal note with your offer that includes something that illustrates your common ground. For example, if you notice that the seller is a gardener, you might want to talk about your own appreciation for gardening.Teixeira also has had clients who won bidding wars simply by being perceptive. “I had one buyer who noticed some San Francisco Giants paraphernalia in the home,” says Teixeira. “The buyer had season tickets to the Giants, so as part of their offer, they gave two tickets to the father and son.”
In the end winning a bidding war can be as simple as convincing the seller that you’re a good person who just wants the transaction to go as smoothly as possible — which is a win-win, because of course that’s what you want, too.
Tell us: Are there bidding wars in your area now?
CREDIT: August 11, 2014 Real Estate