Once you find the perfect home, the next step is putting together your purchase offer. This is when you enter a negotiation between you and the seller. But what if another buyer wants to put an offer on the same home? This is when it get’s tricky.
When you enter a Multiple Offer Bidding War, you will have to take a different approach when writing your offer. If you want to compete with another buyer and stand out as the better offer to the seller, here are a few tips for you…
1. Minimize Offer Contingencies
You don’t know what the other buyers are offering, if they have any contingencies, if they are paying cash, or if they are asking for closing costs. Try to make your offer as attractive as possible without breaking the bank or leaving yourself without room for inspections or ample time for closing. This could simply mean offering more and asking for less. Your real estate agent can advise you on this.
2. Get pre-approved, not just pre-qualified
This is a must when purchasing any home. Even if it is not a bidding war, having a pre-approval letter is something the seller will ask for before accepting any offer. With mortgage underwriters cracking down on loans these days, it is very important to get pre-approved.
3. Choose An Aggressive Price
Typically when it comes to a multiple offer situation, the listing agent will let each buyer know they need to bring their highest and best offer to the table. Keep in mind this might mean something different for each buyer. Do not over stretch yourself financially just to win a bidding war. Make an offer based on your highest and best purchase price. Highest and best also includes the bottom line. The listing agent will plug in the amount of your offer along with any closing costs or things you are asking for within the contract to show the seller what they will net at closing. Whichever offer presents the highest and best under the most favorable terms typically wins.
If you don’t win the bidding war, maybe it’s not meant to be. But if this home is the one you want, follow these tips and the advice of your real estate agent in order to win the bidding war.
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