It happened, you found your perfect house. Congratulations, you’re one step closer to homeownership! You reach out to the listing agent, only to find out that someone else wants the house too. Now you are faced with a bidding war (wait… what?). Before you start to panic, we’re here to explain how to come out on top!
- Don’t bid more than you can afford
Talk to your lender first before you decide how much money you are going to bid. Ideally, you should talk to us before you even start your house search. We will be able to tell you how much you can afford and what type of loan you will be approved for.
Never bid more than you have been approved for! In fact, you should always opt on the lower side. If you bid more than you can actually afford, you could lose the house entirely. Even if you win at the higher amount, it will put you in debt before you even move in. This could lead to late mortgage payments and eventually foreclosure.
That being said, submit your best and final offer early. You don’t want to lose the house because the other buyers bid at a price that you could beat. Another option is to add a clause stating that you will pay $1,000 more than the next ‘best and final,’ capped at the original price as seen in the listing.
- Utilize your agent and your lender
People forget how powerful a face-to-face or phone conversation can be. Everything is done through e-mail, which takes the human touch out of the equation. Have your agent personally speak to the listing agent to address any concerns that they may have. Ask your lender to do the same and you’re solid. While numbers are important to the listing agent, so is the certainty that the purchase will go through.
- Have a flexible closing date
If you are not in a rush to close, let the listing agent know. Most sellers are either looking to sell immediately or they have no timeline in mind. Play either side of the coin if you have the option. For example, if the listing agent mentions that the sellers’ new house won’t be ready for a few weeks, tell the agent that you are in no rush to move. This could swing the bidding war in your favor. On the flip side, if they are looking to move immediately, let the agent know that you can move ASAP. Then work with your lender to ensure the process moves along as quickly as possible.
- Accept the house as-is
The house may need some updating, but if you’re in a bidding situation, it may work in your favor to accept the house as it is. The sellers will be relieved that they don’t have to put any more work into the house and you’ll win the bid!
- Write a letter to the sellers
Most sellers have an attachment to their home. They lived there for years and have made many memories. Write them a letter to explain to them why you want the house and your plans in your new home (example: a place where you can start your family). The sellers will be happy to know that they are giving their house to someone who will truly cherish it.
Have you won a bidding war before? If so, let us know how! 770-552-1000