Which Tips Will Help You Win a Bidding War?
There are three crucial tips to remember if you want to win a bidding war.
How do you win a bidding war?
Before I answer that question, let me add some context to it. This topic was inspired by a client I met the day before I recorded this video. He could've been in a bidding war but shrewdly avoided it while he was working with another agent buying a house in Illinois. He wanted to make an offer on a house he saw online but wasn’t able to make an appointment to see it in person before the weekend. He knew the house would get a lot of showings during that weekend, so he made an offer sight-unseen, which brings me to my first tip...
1. Make a fast and strong offer. The house in this situation was listed at $300,000, and he made an offer very close to that. By doing this, he avoided the possibility that the price would be bid upwards of $305,000 or $310,000. That’s a lot more he would’ve had to settle for if he didn’t act quickly. I’ve used this tip with many clients: We saw a house, knew it would be popular, and made a strong offer immediately so the seller wouldn’t be tempted to wait for other offers.
2. Make the offer as is. This means you don’t ask for any credits or repairs based on the home inspection (you’re still free to cancel the transaction if you don’t like what you find). Making an as-is offer gives the seller confidence that there won’t be a protracted process trying to fix every little thing that’s wrong with the house.
If you love a house, make a fast, strong offer to avoid the price being bid up too high.
3. Make the earnest money non-refundable. Let’s say everything goes well with the inspection and the transaction proceeds. What happens then is the earnest money goes hard. In other words, it's the seller’s money unless the transaction gets to the closing day. Once that happens, it goes back to the buyer like it normally does.
This gives the seller confidence that, even if something goes wrong and they don’t sell, they’ll at least get something out of the deal. It will probably be a fair amount of money, too, since the earnest money deposit is typically 1% of the purchase price. As the buyer, you’ll lose your deposit if you change your mind about the purchase, but doing this is a powerful way to set yourself apart from other buyers who might waste the seller’s time.
If you’d like to know more about how to win a bidding war or have any other real estate questions, don’t hesitate to reach out to me. I’d love to help.
If you have any questions about being a first-time homebuyer, don’t hesitate to reach out to me. There are many programs available to help you, and I’d love to tell you more about them.