Imagine that you have been in the market for a new home for several weeks or longer and have finally toured a house that feels like the perfect fit. You start formulating an offer in your mind, only to learn that the seller has several other offers on the table as well. How can you make sure that yours will make it to the top of the stack?
While there are no guaranteed answers to this question, there are several things to keep in mind that can boost the attractiveness of your specific home purchase offer. The ultimate choice, is, of course, up to the seller. However, you might be able to stay in the running if you remember the ideas mentioned in this blog post.
Draft an offer that fits the seller’s needs
If you encounter a bidding war on a home that you want to purchase, it’s easy to think of it as a buyers’ competition. However, if you want your offer to move to the top of the list, it’s a good idea to remember that the ultimate decision lies with the seller. Therefore, it pays to know what the seller needs.
You might be dealing with a seller who needs to expedite the closing process. Some sellers need to keep living in their homes for up to a month if they haven’t yet gone to closing on a home they themselves are purchasing. You might have a seller who does not want any contingencies. Try to find out what the seller’s specific needs or preferences might bebefore you submit an offer.
Attach a mortgage approval letter to your offer
Another buyer with whom you are competing for an offer on a home might be prequalified for a mortgage. If you can take it a step further by getting a preapproval letter from your lender and attaching it to your offer, you could have a better chance of winning the bid war.
Being preapproved for a mortgage means that lenders have reviewed your financial status in depth and are willing to loan you a specific amount of money to buy a house. A prequalification is more of an estimate, stating that you would likely qualify for a mortgage, while a preapproval letter means that your financial information has been verified. An offer with a preapproval letter might interest a seller more than another buyer who merely has been prequalified for a mortgage.
Cash offers are top of the line in a bidding war
You might make enough proceeds from the sale of your current home to purchase the one you are interested in buying. Or, maybe you have received an inheritance or simply have enough money set aside in your savings account to make the purchase. If so, you almost always will have an advantage over other buyers if you offer a cash purchase on a home.
Enlist support from an experienced real estate agent
Experienced buyer’s agents deal with bid wars all the time. This is one of many reasons why all buyers should make careful decisions when hiring real estate agents. By working with an agent who has your best interests in mind, you can increase your chances of winning a bid war.