How To Win A Bidding WarJonathan
The housing market has extremely tight inventory and as a result there are often multiple bids on a home. If you find yourself competing with multiple bidders, here are some tips to come out on top and win a bidding war.
Have a preapproval letter. A preapproval letter shows you are serious and there won’t be trouble getting a mortgage. Without this other bidders will be in a much stronger position.
Make A Higher Offer
Before doing this, make sure you stay within your budget, but a higher offer is (as common sense dictates) often a key to a winning bid. Your real estate agent can be helpful here to get an idea of how many bids are coming in as well as current market prices in the area.
A really good strategy is to add an escalation clause. This helps you avoid overbidding, you can say you will outbid competing offers by a certain amount (for example $5,000) up to a set maximum price.
Write A Letter
A personal letter to the seller about why you love the property and perhaps why you can’t bid higher can be effective. If you explain what you love about the property and give some background on why you can’t bid higher it can leave a great impression and of course it doesn’t cost you anything to write a letter!
If your bid does not get accepted, then its normally time to keep looking, however you can try to make a backup offer if there is a kick-out clause and have your realtor stay in touch to see if there are issues with the accepted buyers offer.