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As A Homebuyer Should I Get Involved In A Bidding War Or Walk Away?

By
Real Estate Agent with New Jersey Properties 8333464

                                              

 

So you've found the right home, it has all the features you want, the price is right ,and it is in the  neighborhood you want. Suddenly you find out there are multiple offers coming in on "your perfect home."  What do you do, walk away or get involved in a bidding war? This can be a stressful and sometimes even heartbreaking experience,but knowing how to prepare yourself before entering a bidding war may get you the house of your dreams without breaking the bank.tug

 

Know Your Budget

Knowing what you can afford and your target price can really prevent you from making a bid that you may not be able to honor. The best way to do this is to get pre-approved for a mortgage before looking for a home.That way you will be able to act quickly once you find the right home.

Know Its Value

While the home may be the house of your dreams, paying considerably more for it than it is worth is never a wise choice. To avoid getting into this situation, do your homework before making an offer. Have your Realtor show you the recent closed and pending sales of similar homes that sold in the area to determine the fair market value.

Know What You Are Paying For

Determining what features actually come with the house, and how much you'll have to spend to get it in livable condition will give you a clearer picture of what you are paying for, and what your budget can hold.

Bid Smart

The fears in any bidding war are that you may bid too low, or that multiple bids may raise the price higher and higher. To prevent this from happening your best approach is to bid right the first time. Make your best offer the first time. Bidding slightly over asking price or odd amounts the first time can sometimes make the difference between your bid or another being the highest.

By being armed with these tips you may end up with the perfect home at the price you are prepared to pay!

Posted by

Joan Congilose, Broker/ Sales Associate

my picCentury 21 Action Plus Realty

Call or e-mail me Office (732) 462-9510 Cell (732) 232-5277

jcongilose@actionplusrealty.com

www.joancongilose.com

 

Comments (49)

Thomas McCombs
Century 21 HomeStar - Akron, OH

Chasing an offering price too long can lead us to the situation we were in in 2006. Remember how we felt when the prices we agreed to, after many negotiated increases, put so many of us underwater two years later.

It can be disappointing to miss out on the house you wanted, but this short term thinking can lead to long term regrets.

It has been said that if we do not learn from the past, we are doomed to repeat our mistakes in the future.

Mar 19, 2013 01:34 AM
Dana Basiliere
Rossi & Riina Real Estate - Williston, VT
Making deals "Happen"

Joan, Good post and topic. It is coming up more and more (again) and I tell my buyers when you find the right house jump on it before there are multiple offers. Many times an indecisive buyer will delay and then have to jump in to bidding war; or stand down on the house they want. I say if it is the right house put in a good offer and don't delay on any negotiations.

Mar 19, 2013 01:41 AM
Jon Quist
REALTY EXECUTIVES ARIZONA TERRITORY - Tucson, AZ
Tucson's BUYERS ONLY Realtor since 1996

The advice to "make your best offer" initially is a sound method. I don't like bidding wars. Many buyers get hurt as part of this process.

Mar 19, 2013 02:22 AM
Joan Congilose
New Jersey Properties - Manalapan, NJ
Helping Sellers & Buyers

It's funny this topic was brought up at our office meeting today  and we all agreed that our greatest challenge in this market is the appraisal and keeping a fiduciary responsibility to both the seller and the buyers. They need to know that all offers are  being presented fairly. Use of escalation clauses did come up as well, but I haven't seen them used as of yet. 

 

Mar 19, 2013 03:44 AM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

Whatever the offer, the appraisal will determine the market offer, so making a higher offer gets yours accepted but the appraisal will justify or reduce your offering with an appraisal contingency. 

Mar 19, 2013 04:04 AM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Joan, we agree and that is a great blog.  Best to keep the emotion out of it and focus on value.

Mar 19, 2013 04:52 AM
Lehel Szucs
All Seasons Real Estate, Inc. - Covina, CA
REALTOR of choice

do not get involved ... offer the best price you are willing to pay with the best terms ... if you get it you do ... if not, well than it was not meant to be ... 

Mar 19, 2013 05:32 AM
Anonymous
Jim Miner

I always have my buyers look at the home (as much as possible) as if they were purchasing an investment property.  I have yet to have a buyer that could care less if they make money.  We have even over bought (with regards to price) however with the investment hat on, extenuating circumstances justified the investment.

Liked the post.

Jim 

Mar 19, 2013 05:54 AM
#37
Christi Farrington
Dagny's Real Estate - Wilton, CT
~ Your representative in Fairfield County, CT

Thank you Joan.  All good information.  I always give them the tools to make a wise decision along with the advice to make an offer with which they are comfortable. 

Mar 19, 2013 06:36 AM
Gijs Van Breugel
TERRA FRANCE | International Estate Agents for France
TERRA FRANCE | International Estate Agents

I think that just that you may encounter bidding wars is a good economic sign - In France we are not yet in that stage again - but would I want to be ???

Mar 19, 2013 10:57 AM
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info
I find a lot of buyers don't want to get into a bidding war, but with these pointers maybe they'll rethink that position. Thanks for posting.
Mar 19, 2013 01:25 PM
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Joan, this is a great post. Working with a Realtor who can provide data to help the buyer make an educated decision is important.

Mar 19, 2013 03:21 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Joan - It's hard to avoid a bidding war in our Orange County market now, and you've made good recommendations.

Mar 19, 2013 04:43 PM
Debbie Cook
Long & Foster Real Estate, Inc - Silver Spring, MD
Silver Spring and Takoma Park Maryland Real Estate

Good tips for buyers.  The trick is keeping calm and not getting sucked into a frenzy!

Mar 19, 2013 08:55 PM
David Grbich
Realty One Group - www.FindCARealEstate.com - San Juan Capistrano, CA
Orange County Real Estate - 949-500-0484

Joan - excellent advice - our socal market is so hot that multiple offers are pretty much a given and buyers need to make their best offers based on value and what they can afford and of course how much they want the home. Regards Dave

Mar 20, 2013 01:09 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Generally good advise.  I have people get discouraged and tell me they are going to wait for the market to "Settle Down" well it is only going to "Settle Up."

Mar 20, 2013 04:25 AM
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor
I agree, figure out what the most is you are willing to pay and can afford to pay, and make your strongest offer at that amount. Don't play bidding games, and don't include an escalation clause, especially if you check the box on the escalation clause that says it's contingent on appraisal.
Mar 20, 2013 08:36 AM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

These are good points. I would add: Be prepared (as you are). Have a multiple offer game plan (Put yourself in the Sellers shoes). Act fast. Be patient.

May 19, 2013 11:58 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker

The Texas Real Estate Commission has prohibited agent here from using escalation clauses.

Oct 22, 2013 10:06 PM
Nancy Tallman
Summit Sotheby's International Realty - Park City, UT
Real Estate Strategist

Multiple offers are emotionally draining for buyers and sellers.  I pride myself on trying to "win" a multiple offer situation for my buyers.  Generally the multiple offer situation is proof that the house is marketable and fairly priced.  Escalation clauses are used in our market and can be a bit scary.  Competing with cash offers when your buyer needs financing is also a challenge that I recently wrote about here.

Oct 23, 2013 05:36 AM