CNBC recently revealed an uptick in home bidding. As much as 56% of offers in 2021 were facing bidding wars and over half of homes were under a contract in fewer than two weeks.
Buying a home is life-changing and brings with it a whirlwind of emotions. When you are already on an emotional high, and someone else wants the same home as you do, the stress compiles itself.
If you find yourself in a war bidding on a home, there are some dos and don’ts that will help to get you through this experience. Here, we will tell you how you can navigate this type of scenario and keep it cool. Here we go!
Do Give the Best Offer
The first piece of advice that a professional agent will advise you when home bidding is that you come to the table with your best offer and your last offer. When multiple offers are on the table, it is not likely that you will have time to negotiate with the seller. That is why your bid must be as high as you will go.
If another buyer comes in higher, you must be okay with the loss of the new house. You will not know what the other bids are. You will find out what the last sale price comes in at, however.
Don’t Be Concerned with List Price
The selling price is not the list price, so keep that in mind with budgeting. Often, a home buyer can end up paying one to three percent above the list price on average. This is a good percentage to keep in mind with bidding on a home, but it varies depending on the location of the home.
Do Be Willing to Waive Contingencies
If you find fierce competition for the new house you desire, you must prepare to come into a deal with zero or just a few contingencies. This can mean waiving a sale contingency, home inspection, and more.
New construction is not likely to have problems, but an older property might have some issues to fix. Before you waive contingencies, prepare yourself mentally for what waiving contingencies can mean if you end up having the seller accept your offer.
Don’t Think that the Highest Bid Wins
A seller has things they want beyond just the highest price, and you can use this to your advantage. What can make you stand out? There are things like:
- Fast closing and possession
- Few contingencies
- A free leaseback term
- A short option period
- Personal letter to the seller
You still need to offer an amount to make you competitive dollar-wise, but these suggestions are a great way to stand out. If you want more advice on how to edge out competitors when there are multiple bids, read the full details here.
Do Have Professionals Ready
Often a seller will want to move fast, so anything you can do to speed up the process will work well in your favor. You should have a pre-approval or conditional approval for mortgage financing available at hand.
While you may have to waive the home inspection, you can always have an inspector in your back pocket, ready just in case. Plus, you will want an attorney ready and available for sale. Keep the timelines tight as you can to make your offer the most attractive offer.
Don’t Be Pushy on Closing Date
If the seller wants a quick closing date, that is great. However, they may be concerned about how quickly they can find their new house. Providing flexibility on a closing date will bode well in your favor.
Do Time it Well
While there is no one size fits all answer to this, regardless, timing in life is everything, right? Why should buying a house be any different?
Here is a typical circumstance. Usually, a list will hit the housing marketing on a Thursday or Friday during the week. Then, buyers will come for viewings on the weekend.
Offers may need to be in at a specific time for Monday. The seller can take offers even prior to a set deadline.
It is good to know if the seller is motivated to move fast, and your agent can help you get this information. Further, the agent can advise you on the best time to do your bid.
Don’t Make an Offer Without Research First
You know that old saying, “If it seems too good to be true, it is.” It’s like that when buying a home. If it seems like the new house is just too good to be true, it may not be worth bidding on.
When you research enough properties, you will get to know the trends for the age of the home, dwelling type, and square footage. If a listing does not appear to fit the going rates in the market, then there is probably a reason for that. Maybe it has a suspicious history or cosmetic fixes are necessary.
You want to be bidding on a new house that is safe and will meet the standards of your life. No matter how much you may want it, if it is too good to be true, don’t fret. Move along to something else.
Do Stay Encouraged
If you end up losing one or more of your home biddings, it’s easy to feel discouraged, but do not feel that way. Finding a new house can take time. Prepare yourself mentally and do not feel rushed.
This is an enormous investment, and it is okay to take your time to get it right. Hang in there!
Bidding on a Home
Now that you know more about the do’s of bidding on a home, like giving your best offer, being willing to waive contingencies, having professionals ready for the sale, and more, we hope you can use this timely advice to find the new house of your dreams.
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