Even though the economy is still recovering, the housing market in key areas is beginning to boom again. All throughout the nation, upward changes can be seen in the real estate field. For example, if you are looking for a well-appointed home in one of the best neighborhoods of Chicago, you should not be surprised if you find yourself in a bidding war with several other interested buyers. In order to minimize your risk of losing out on the home of your dreams, it is important to be proactive and take several key steps.
Tips For Winning A Bidding War
1. Go Through The Pre-Approval Process – Having a pre-approval letter from a mortgage lender is one of the best ways to get a seller’s attention. It will signal that you are serious in your pursuit of buying a home and you are not just a weekend “looky-lou.” In fact, there are many people who will not even accept an offer on their home unless it is accompanied by a pre-approval letter. Therefore, you should go through the process of getting pre-approved before you begin seriously looking at real estate. It will be one less step you have to achieve when shopping for a home and will make your choices of houses easier.
2. Establish A Rapport With The Seller – Being nice alone is not likely to sway the seller in your direction during a bidding war, but it certainly cannot hurt. Although the real estate market is on the upswing, it is still serious business and the seller is trying to sell their home in a tough economy. Try striking up a conversation with the seller, find out if you have common grounds or connections. People with the same interests, alumni and social groups or clubs seem to levitate towards each other. Commonality can give you the winning edge over another buyer. If you take this a step further by taking the time to develop an actual rapport with the seller, it is definitely possible that this could factor into their selling decision.
3. Offer More Than The Asking Price – Although buyers are typically told to offer less than the asking price, it is important to realize when this strategy will not work. There is a strong chance, in great locales, that you could be outbid or the seller is not going to budge on their price for the home. After all, if the home you are interested in is in a highly desirable area, you may have no choice other than to offer a high figure if you do not want to end up dealing with a drawn out bidding war.
4. Work With An Experienced Real Estate Agent – Bidding wars can be difficult to deal with, especially if you are not working with someone who has experience working with real estate deals in your targeted area. For example, the real estate professionals at Movoto know the local area, explain the home buying process, negotiate as needed, and handle all the paperwork and red tape. You should always have an experienced local real estate agent on your side.
5. Do Not Waste Time – Many people believe that it is best to look at every applicable home on the market before they make a decision. Whether by going online to virtually visit homes first or shopping in person. However, if you find a home that you really love, it is important to make an offer before someone else buys it. Additionally, if you are in the middle of a bidding war, it is vital to act quickly or you are likely to lose.
6. Minimize Your Demands – The more desirable the home is, the less motivated the seller will be to put up with a long list of demands. When the seller knows that they have a gem of property, trying to haggle for an extremely lower price or big changes to the house could make the seller go cold with your bid. Therefore, it is best to avoid making any unnecessary demands or requests. After all, if the other bidder makes the process less complicated, they are much more likely to win.
As long as you move quickly, minimize your demands and make a fair offer, your odds of winning a bidding war will be high. Keep in mind that building a rapport with the seller is also a good way to keep yourself high on their radar, and an experienced real estate agent can ensure that the process goes smoothly.