It’s no secret that the housing market has been a little crazy! In the last 2 weeks, our clients have been in 5 different bidding wars. WOW!
Now we could talk about the economical forces that are creating this scenario, but for today, we’ll focus on some things you can do as a buyer to strengthen your chances of winning a bidding war, and ways to keep your head up when your offer isn’t selected.
Writing the Offer
- Remove the fluff.
Don’t ask for any of the frills (i.e. seller paid closing costs, a home warranty, review of indentures contingency, etc.). Of course, if you financially and comfortably need these items, do not remove them. But if they’re just a ‘nice to have’, remove them. It’ll strengthen your offer! - Be flexible on your closing date.
Do the sellers want a quick or slow closing? Are they off work on Mondays? Find out this information, and propose a date that makes it most convenient for them! - Make it convenient for the seller.
Did they just buy their dream kitchen refrigerator and can’t imagine parting with it, OR was that fridge a huge pain to get through the front door and they’d love for someone to take it off their hands? Learn this information and specify your inclusions and exclusions accordingly. - Move quickly.
Shorten your time frames! This could be your loan commitment, your inspection window, or both! Getting through the contingencies promptly will give the seller more confidence in your seriousness to close. - Up the earnest money.
Typically, we recommend buyers place around 1% of purchase price in earnest money with the title company. In a bidding war, try increasing this number to 2-5%. While this doesn’t alter the purpose or final destination of your earnest money, it shows the seller that you are here to win this war!
Dealing with Rejection
In this market, it’s not rare to miss out on your first bidding war. THAT’S OKAY! Here are a couple things to remember if this happens:
- There will be more!
New homes are hitting the market hourly. While that former home may have seemed like ‘the one’, it wasn’t meant to be, and there’s another one out there just waiting for you to find it! Learn what you could have done differently with the last offer, and take that with you for the next one. - It’s not personal.
Seriously, it’s not. But we understand this one is tough to digest. “Why didn’t they want MY offer?” It has nothing to do with you personally – likely, someone else just offered them a better deal. Try and stay objective here. - Change up your strategy.
Are you only looking at new listings that are pricing in a way to attract a bidding war? Maybe try only looking at listings that have been on the market for a week – the possibility of multiple offers significantly decreases after the first week on market. Or, get creative and ask your trusted real estate agent to help you find some off market properties. The possibilities are endless!
Keep your heads up, buyers! Your new place is just around the corner – literally 🙂