6 Tips for Handling Bidding Wars as a Buyer

There's almost nothing more exciting than buying a house, especially if it's your first time.  However, it's also a scary endeavor. That is why it’s key to work with a Realtor. They have their fingers on the pulse of the real estate market and run their businesses for the sole purpose of helping people buy and sell homes. Realtors are key, especially in a seller’s market with fierce competition, lines out the door for showings, and multiple offers. In this article, we give you some suggestions on how to make your offer stand out in a seller’s market. Tip #1 Get Your Pre-Approval Letter Before you start house hunting, make sure you get pre-approved for a mortgage. Sellers are searching for serious purchasers who will see a deal through to completion. A pre-approval letter demonstrates to the seller that you are serious about purchasing their property. It also indicates to the seller that you will have no difficulty obtaining a mortgage to buy the house. A  seller may overlook your offer if you don't get pre-approved before making the offer. Ensure the pre-approval paperwork you display is unique to the home in question. Tip #2 Make the Highest Offer When looking for tips on handling bidding wars as a buyer, the advice to offer the most money should be obvious. Outbidding the competition is the most straightforward approach to win a  bidding war in real estate or any other matter. If you can put together a little more cash than the competition, you will almost certainly be the seller's first pick. This is because, when it comes to making a decision,  a larger offer generally carries a lot of weight. After all, the great majority of homeowners want to maximize their profits when selling a home. If you think you've found your dream home, you might have to pay more than they originally asked for.  Just make sure it all fits into the home buying budget you decided on before you started house hunting. If you find out the seller's needs, you might be able to avoid the bidding war altogether. Tip #3 Include an Escalation Clause What if you found your dream home and want to make an offer but are worried about competition?  In that case, you may utilize an escalation clause to make sure you always have the highest offer. Here's how it works: Let's say you want to make an offer on a property.  You know you'll have to face competition to buy the house, but you don't know how much your rivals are willing to pay. If you decide to utilize this tip, your Realtor can include an escalation clause in your offer. That clause will state that you're willing to pay a particular amount over any other offer up to your budget limit. This way, you'll always outbid your competitors unless they decide to do the same thing and have a higher budget than you. However, the chances of that happening are small. And, if no one else is interested in the house, you won't be wasting any extra money. Offering cash instead of opting for a mortgage is a great option that will get you on the seller's good side. Tip #4 Offer Cash Another one of our favorite tips on handling bidding wars as a buyer is to offer cash. Obviously,  this doesn't apply to everyone. However, if you have enough cash to meet the purchase price,  you should offer to pay it all upfront rather than taking out a loan. You're not only removing the need for a third party to become involved in the transaction, but you're also demonstrating to the seller that you're a serious buyer. When there's a lender involved, there's a risk.  Removing their presence eliminates the danger sellers might be worried about. Tip #5 Buy the Property “As-Is.” When you see the term sold “as-is”, that means you get the property in the exact condition you see it in. In a seller’s market, buyers often purchase a property “as is.” This is appealing to the seller because they do not need to repair any items as they might do in a typical transaction. This is different than “waiving” the inspection, which would mean you will not have an inspection done on the property. In an “as is” deal, the buyer still has the right to an inspection so they know the condition of the home. Expressing the reasons you love the property is an excellent way to win over the seller. Tip #6 Write a Personal Letter Sharing your experience is a definite approach to help you stand out from the competition in a  bidding war. While drafting a letter isn't very distinctive in and of itself, your personal interest is. This is an interesting approach because many homeowners are emotionally attached to their homes. They will think back on the memories they've built in the space, and they can't help but wish the next family that moves in will create their own. That's why you could appeal to the sellers' emotional side by expressing your love for the property. You can also offer your vision of family dinners with your kids in the kitchen and unwrapping presents on the living room floor on Christmas morning. If you make sellers understand why you love the home so much and what potential you see in the home, you can really get on the seller's good side. When You Win a Bidding War If you use any or all of these techniques, you're chances of winning the bidding war are increased. After you win the bidding war, a lot of paperwork comes, and then, finally, the moving day. However, you should probably take care of a few things before the moving day. For example, you should clean and sanitize everything before moving in to ensure the place is entirely germ-free and spotless. Then, it would be best to consider giving the walls a fresh coat of paint. This is way easier to do before all of your stuff is moved into the home. Conclusion Getting involved in a bidding war is never fun. Your emotions will run high in your attempt to be the highest bidder. There will be wild thoughts like "did I make the best offer" or "could I have done something more to win" running through your head at all times. These are natural and expected.  Continue to use our tips on handling bidding wars as a buyer, and your day will come to move into your new home!

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