Since there are fewer homes in the market than there are homeowner wanna be's, a entering a bid can mean war.
1. Personally introduce yourself to the seller if possible. He may recognize you, thus making the offer more personable. This can really help you win the bid.
2. Do not put conditions in your offer, if possible, because it is more appealing to sellers. You may consult your mortgage banker to make sure the price goes within your limit and that financing is easily available.
3. Prepare ahead of time. Make sure you get pre-approved for a mortgage. Have your "Pre-Qual" letter available to present to the seller.
Always know what your cut off price is before you start bidding. This will avoid emotional bidding or getting caught up in the bidding frenzy. Winning a bidding war is great but not if you have to pay well above market value or well above your means.
Do some research about the other homes in the area. This will help you determine the market value of the home you wish to purchase. However, beware that in a popular neighborhood with limited homes available, a home may sell well above its true market value. Be careful not to offend the seller by pricing your offer too low.
Put down a deposit that is more than what they are asking for. This will appeal to the seller.
Give the seller a longer closing date or offer to close on their preferred date. In the event the appraisal comes in low you can give yourself time to make-up the difference if the seller does not want to adjust downward. In addition "cash" back up buyers for greater than your sales price will entice the seller to lose your contract and take their contract. More contractual time negotiated up front will help you here
Always make your best bid at the beginning because most of the times you will only get one chance to bid. Try to know ahead of time how many offers will be presented. This will help you determine how to price your offer. The more offers, the higher the final selling price will be.
Offer the seller personal information when you make an offer. For example, reassure him/her that you will keep and maintain their garden, or that you plan on keeping all the original trees, etc. Home owners become very attached to their home and knowing that the next owner will take good care of the house they spent so many years in will be reassuring.
Use VA financing if your eligible. People often think VA financing (Veterans) are less likely to get an offer accepted, the truth is many sellers are more willing to sell to a Veteran than an out-of-state investor. Entering into a bidding war can be stressful and emotional. However, if you take the time to prepare yourself and follow the tips mentioned above, you will be in a great position to win the bid. Good luck!
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