When it comes to buying a home, most individuals hope to stake out their dream property and close on it quickly and without problems. However, when there is a high amount of interest for a single house, a bidding war might ensue. Entering into a bidding war can be stressful for buyers, but there are steps they can take to both lower their anxiety and increase their chances of coming out on top.
Work with the right people
Teaming up with the right real estate agent can be in a buyer’s favor when a bidding war situation occurs. Working with a local agent can be beneficial as they often have insight about the area so they are able to explain whether the prices being offered are realistic for the location. In addition, local agents who have a strong reputation in the area can be more attractive to sellers, because they might feel more confident that a sale will actually go through, according to Fox Business.
In addition to working with a reputable agent, getting prequalified for a loan can also make buyers more attractive to sellers. This can ease sellers’ fears about a buyer’s ability to obtain financing, and make the closing process go more smoothly. Buyers should be prepared to provide written confirmation that they have been preapproved.
Provide an incentive
Buyers who are prepared to provide a large down payment are also more likely to come out ahead during a bidding war. Making a sizable down payment demonstrates to sellers that individuals are serious about the property. In addition, buyers who offer to pay cash may also boost their chances of securing the home.
In some cases, buyers may also speed up the process by agreeing to purchase the home without requiring the seller to make certain repairs. However, it’s important that buyers are careful when agreeing to these terms. While small repairs, such as fixing broken fences or replacing fixtures, can be done easily by buyers, more costly problems, such as structural issues or electrical problems can be more expensive.
Know when to call it quits
Few buyers want to give up during a bidding war, but it’s important to have a spending limit in mind to avoid going over their budget. A real estate agent can be helpful in determining the worth of a home, and if the asking price has significantly exceeded that figure, buyers may consider continuing their home search elsewhere.