Buying a House? Win The Bidding War With These Tips
Bidding on a home can be tough to win especially if there are lots of offers. You are very likely to run into competitive offers, but you can still win the war with a bit of strategic thinking and taking the right approach. Here are some strategies to help you win the bidding war.
Offer the highest price
Everyone knows this already, but it is important to point it out. The easiest way to win a bidding is by offering the highest price. Since homeowners want to make enough money, they will likely offer the home to the highest bidder.
Flaunt the cash
You will easily win a bidding war when you make a cash offer. Sellers are likely to give their homes to bidders with cash. One reason you will likely win the bidding war when you make a cash offer is because the seller doesn’t want a situation where the winner of the bid later changes their mind for some reasons.
Include an escalation clause in your offer
An escalation clause can help you secure a home if applied properly. An escalation clause simply states that a buyer will agree to outbid other offers by a specified amount of money and not exceeding a set price. In using this, you are simply letting the seller know that you are very serious about acquiring the property. You need to use a reasonable amount like from $5000 above to let the seller take you seriously.
Write a personal letter
It may be surprising, but you can get ahead of other bidders when you write a personal letter to the seller. When properly written, you could win the heart of the seller through a personal letter. Well, it works well with a onetime seller and an emotional person, not an investor, but you can still try your luck.
Waive your financing contingency
Through a financial contingency, you are letting the seller know that you will only buy the property when the loan is secured. What if the loan doesn’t get approved?
Well, with a waiver, you are letting the seller know that you are very confident you will secure the loan¸ and you risk losing your deposit which is usually about five percent.
To cut your risks, it is advisable to waive the financial contingency, and try getting a lender that will agree to a fully underwritten loan pre-approval. Getting such lenders is rare, but it will make you confident that your loan will be approved.
Waive the inspection contingency
As a buyer, you have the right to abandon the contract if you notice any discrepancies. This right is mostly known as the inspection contingency, and you can increase your chances of winning the bid by waiving this right. This can pose a great risk especially if you get to discover hidden flaws that would cost you a fortune to fix.
Don’t spend much time inspecting the home
If you insist on inspecting the home, then keep the time frame short. A seller is more likely to offer the home to one with a short contingency time frame. Ensure that the contingency period is not more than a week.
There are many other strategies you can using in winning the bidding war, but with the ones listed above, you will rapidly outsmart your competitors and increase your chances of winning the bidding war.
