How to win a real estate bidding war
In today’s housing market, running into competition is par for the course – and the weakest bids won’t survive.
Luckily for less well-heeled house hunters, there’s more that goes into winning a bidding war than throwing money at your opponents until they buckle.
“If you are serious about buying, it becomes a bit of a part time job,” says Zillow.com real estate expert Brendon DeSimone. “This is your home and your only investment.”
We asked DeSimone to clue consumers into how they can make their bids stand out.
1. Don’t wait for the open house. DeSimone is quick to advise clients to see as many houses as possible on weekends — whether or not they’re invited. ”With the Internet, information moves so quickly. [Sellers] could do a private showing Wednesday [days before a scheduled open house]” he says. “If it looks good online, go see it.”
2. Don’t be intimidated by higher bidders. Investors and average joes alike are flocking to snatch up deals on homes. Don’t let them psych you out, DeSimone says. “Don’t spend too much energy trying to figure out what’s really going on with the other offers. If you love the property, keep moving forward, but at your own pace. Make the offer you’re comfortable with, and only when you’re comfortable making it.”
3. Pick a broker who’s local and well-known. That’s because 80% of business is done by just 20% of brokers. The more respected they are within the community, the better shot they have at wooing listing agents. ”My clients (win) because the listing agent knows me,” DeSimone says. “In a competitive situation, working with a known broker will make the listing agent feel better and boost your chances, especially if two offers are close.”
4. Get in the listing agent’s good books. Why? Because the listing agent is the only person who meets all the parties involved in a sale. ”Though the seller ultimately decides and signs a contract, the listing agent has a giant say in who gets the property in a competitive situation,” DeSimone says. “If you make a good impression with the listing agent, you are in much better shape. Acting like a jerk to the agent tells the sellers to work with another offer.”
5. Line up an appraisal even before making an offer. “One thing I once did was to have the bank try to get an appraiser lined up and on their calendar before an offer was made,” DeSimone says. “That way, the buyer could tell the seller that the appraisal would happen within x days of signing a contract. If you tell the seller two or three weeks, your offer looks weaker.”
6. Look for the ugliest house on a great block. It may sound counterintuitive, but you’re better off looking at a fixer-upper than going for the McMansion next door. Chances are competition won’t be as fierce. ”You can always improve the property and therefore increase its value,” says DeSimone. “And because it’s on a great block, improvements you make to the home will be practically guaranteed to give you a top return on your investment.”
7. Know your neighbours — and what their homes are worth. Getting to know the neighbourhood you’re hoping to call home one day goes far beyond scoping out local schools and seeing who prowls the streets at night. ”When you are ready to seriously write offers and compete, you should know what is going on with the local neighbourhood market,” DeSimone says. “Follow what has recently sold, what was competitive and what was not.”
8. Hire an inspector within two days of submitting your offer. “Order the inspection before you write the offer. It doesn’t necessarily have to be two days but your offer should show the seller that you are prepared to move quickly,” DeSimone says. ”If you wait two weeks and then the inspector finds something and you walk away, the seller is left out to dry. The seller wants to know this is out of the way quickly.”
9. Sweeten your bid with cash. More often than not, most homebuyers simply can’t afford to plop down $180,000 in cash on a new home. But when it comes to sweetening your bid, offering to pay at least the deposit in cash could push you over the edge. ”The more you offer, the better,” DeSimone says.
Source: Mandi Woodruff, Business Insider
