It’s great to see the Sudbury and Wayland housing markets recover after a big letdown and enjoy the hot new market. But, with the recovery comes a tight supply of homes, multiple offers – and bidding wars. Knowing a few tricks of the real estate trade can help you emerge with the best bid and be the winner in a bidding war.
Get in Early
For one, you should try to get in as soon as possible to see the house and be the first offer – but don’t insult the seller with a lowball offer – especially with so few listings on the market today. This is assuming they are not holding offers to present at a later date.
Bid over asking
Most Sellers today are pricing their homes on the lower end of the range and expecting them to get bid up. One trick of the trade that really works is to add an escalation clause to the bid. Have your Realtor ask the Listing Agent if they are accepting them.
For example, if the price of the home is $500,000 and you think it might rise as high as $550,000, add a clause that says you will go as high as $560,000 (if that’s true and you really want the home). The clause should state that if the Seller has an offer from your offer price to $560,000, you will go $5000 over any offer with proof of the offer up to your cap.
For example, if the bids on the home only go as high as $530,000 you would be willing to pay $535,000 and won’t be expected to pay $560,000.
Make Your Offer Stand Out
Another tip to make your offer stand out is to send the seller a letter (with your offer). Tell the seller how much you love the home and mention something about the home that you particularly like and how your family will enjoy and take care of the home. Some Listing Agents are not allowing these so-called “love letters” anymore since they could put the Seller in a position that could be perceived as favoriting a buyer due to something other than their offer. As long as the Listing Agent is willing to take them, it can’t hurt to let your feelings known.
Use Cash
Plan to spend as much cash as you can on the down payment and be sure to get approved for a loan ahead of time. Sellers are leery of loans that aren’t a sure thing and bringing as much cash as you can to the table makes a difference.
Get a Pre-inspection
Go in armed with a pre-inspection. The few hundred dollars it will cost is well worth the time and money. And the seller will know that you’re serious about wanting the home. Have the pre-inspection performed before making an offer on the house.
If you don’t have the time to do this, just know that in this market lots of your competition will be doing so or simply waiving the Inspection Contingency to make their offer stand out knowing that most Sellers are not willing to help with issues that may arise. This depends completely on your knowledge of homes and comfort level.
Count on Your Agent
Your real estate agent can be a huge asset in a bidding war. She can let the seller know that you’re completely enamored with the house and be specific about what you like about it. Chances are, the seller will appreciate that you noticed the touches he was responsible for.
Research Ahead
Finally, be smart during a bidding war. Compare the most recent comps and research the market before getting into a bidding war and don’t let your emotional attachment to the house empty your wallet.
It’s easy to overpay when you get caught up in the emotions of a bidding war, but remember there’s always another house that you’ll love and enjoy. Too many buyers get caught up in the emotional aspect of purchasing a home and go overboard in a bidding war.
My advice has always been, after looking at the comparable homes that have recently sold, give the price that you will be so happy if you get the home and ok if you don’t. You may not have a second chance so you do not want to leave with any regrets!