Real estate agents know better than anyone how critical it is to win in a competitive marketplace. Some buyers will want to avoid a bidding war altogether, but for those that want to engage, here are some tips on how to come away successful.
This business acumen is an essential skill that agents use as they negotiate home purchases on behalf of buyers. Staying under budget is critical when buying a house, but that’s a tall order in a bidding war. Here are a few tips for winning a bidding war without busting the bank!
Offer Cash
Cash is king in most negotiations. There’s always a risk that a real estate contract will fall apart at the last minute. Deals fall through when the mortgage lender is unable to get the buyers approved for the loan or the appraisal is lower than the sales price. (For an agent, this is where commission advance companies step in to keep cash flowing while you work out details to close the deal.) For homebuyers, a larger down payment increases the likelihood that a contract will go through without faltering.
Limit Conditions
Cash is king, but a higher sales price isn’t always what wins in a bidding war. An as-is offer, meaning the buyers will not attempt to renegotiate sales price or request repairs following a home inspection, can be an appealing alternative for sellers just wanting to make the sale without hassle.
Quick Closing
Proposing a quick closing may also be a solution to bidding more than your home buying budget can bear. If a seller already plans to move to another state within a few weeks, getting their home sold quickly may be of more value to the sellers than getting a few extra thousand dollars.
Play Hardball
One simple way to establish the best price without busting your budget is to go about making a monetary offer without taking a complete stab in the dark. Simply offer a clause to go $1,000 over the top of the highest bid. This should guarantee that the listing agent will call and double check that buyers can afford to go $1,000 over the top bid.
Everything in a real estate contract is negotiable, including the type of loan, the length of the inspection period, the closing day, and the price. While price is an important consideration, in many cases, it’s not the only one sellers will make when they parse through multiple offers. When the goal is to get the house without breaking the bank, these alternatives can be the difference between winning a bidding war or continuing to search for a home to buy.