4 Tips on Being Prepared for a Bidding War

by | Dec 1, 2020 | Home Buyers | 0 comments

Being Prepared for a Bidding War

A Bidding War may be inevitable. The real estate market is booming, even though we are into the fall and winter. More people are moving out of the big city and into smaller suburban communities, especially those like Lewiston, Youngstown, Middleport, and Niagara. Those moving from the east side of the state to the West are looking for more space, better taxes, and more enjoyment at home.

While we probably won’t always be stuck at home like we are now, more and more people are looking for unique items and features of a home, like home offices, outdoor living space, and general living areas where the entire family can enjoy each other and yet have separate spaces when needed.

All of this is bringing a lot of people to our side of the state, which means a lot of offers and competitive markets. So how can buyers prepare themselves for a bidding war? Here are five steps I tell all of my buyers to take before jumping into the real estate market on this side of the state.

#1. Have your financing ready to go.Being Prepared for a Bidding War

Before looking at any homes it’s imperative to know how much you can afford and have proof of it. Speak to a lender and get a preapproval letter so that you know how much home you can afford and are ready to prove it to sellers. If sellers get three offers and only one is a guaranteed financial option, chances are the sellers are going to go with that offer rather than the other two. You want all of your ducks in a row before making an offer and that means setting up your preapproval mortgage before submitting an offer.

#2. Know what you’re going to do with your existing home.

Are you planning on offering a contingent offer on a property? This means that the only way you can buy a property is by selling your existing home. In a competitive market, sellers usually reject any contingent offers because they know they don’t have to accept them. However, it can be a risk selling first and buying later. This is a delicate balance so it’s important to speak to a real estate agent that knows both sides of the scenario.

Depending on how quickly your old home can sell and how confident you are can project the outcome of submitting an offer on a new home. Perhaps a bridge loan from one house to another is the best option if you’re unsure of how quickly your existing home will sell.

#3. Use an experienced agent to help in the bidding war.

A lot of new or amateur agents may not understand the nuances and strategies to negotiate. A great agent would contact the listing agent first to discuss the motivation for the seller and what they’re really looking for. This works wonders and goes far beyond simply submitting an offer without any communication ahead of time. Using an agent that is well-versed and experienced in negotiations and working through a bidding war is the key to really getting your offer accepted.

#4. Personal letters may or may not work.

This is where the previous tip really comes in handy. I had a client where she had just lost her husband and needed to sell her house. It was an extremely hot market and she received seven offers in one week. Six of those offers had personal letters with them and she ended up choosing the one without the letter. Now, this is an unusual case but the situation was so overwhelming for her that she didn’t have the energy or bandwidth to look through the letters and simply went with the best deal.

If the agent had contacted us to discuss the situation they may have understood exactly the motivation for selling and how to submit an offer. They would’ve understood that a personal letter meant nothing to her. Sometimes it does, which is why having that communication between the buyer’s agent and the listing agent ahead of time is so crucial. Understanding the motivation of the seller, why they are selling, and how to appeal to them, can really work wonders in getting your offer accepted.

While these of four tips are not the end-all for getting your offer accepted they are a good start. Again, having the right agent on your side that understands the micro markets of each individual neighborhood is really key as well. A good network of agents in the area and knowing them can also help get your offer accepted.

For more information on competing in a bidding war, feel free to contact me at any time. I’d love to offer tips and suggestions on getting your offer accepted and how you can own a home in Lewiston, Youngstown, or anywhere in this part of New York. Ready to buy or sell a home in Lewiston New York? Feel free to contact my office at any time for more information, details on any listing you find on my website, or if you’d like a free consultation on what your home is currently worth.

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