After months of searching for your dream house, you’ve finally found it. But it, unfortunately, seems to be the dream home of other buyers and now you are caught in a bidding war.
If you are looking for houses for sale during a time where it’s a seller’s market, you are likely to come across a real estate bidding war.
Here are some tips from Scott to help you understand the real estate bidding process, and how can win the bidding war and move into your dream home.
What is a real estate bidding war?
A real estate bidding war occurs when there are multiple buyers who are competing for one house. Each buyer will try and make a more attractive offer, which often leads to driving up the price than what it was originally listed for.
Bidding wars are more likely to occur during a seller’s market due to the low inventory, but they can also happen when the house is in a very desirable location. A bidding war is very beneficial to home sellers because their property can sell above the asking price.
How to win a bidding war
Here are a few strategies that can help you win your next bidding war. If you are interested in learning more strategies, you can contact Scott Vanderspek, your Surrey real estate agent.
Have a pre-approval letter
We suggest getting pre-approved for a mortgage before you even start looking for houses for sale. A pre-approval letter offers a precise mortgage based on your bank statements, credit score and other official documentation.
Having your pre-approval letter in hand tells the seller and their agent that you are serious about buying their home. Plus, they now know that you won’t be running into any trouble getting approved for a mortgage.
Being approved is helpful even if you are not anticipating a home bidding war.
Hire an experienced real estate agent
If you have found your dream home and you don’t want it to slip out of your grasp, it’s wise to work with a qualified and experienced real estate agent.
Real estate agents have the experience and skills necessary to help you win that bidding war. They also have market knowledge, which is crucial in determining the fair market value of the home you’re interested in.
It’s common for buyers to get so competitive during bidding wars that they make risky financial decisions. By enlisting the services of an agent, you can feel confident that you won’t offer more than the house is worth or more than you can realistically afford to pay for it. Your agent will approach the deal with a cool head and ensure that all decisions made are in your best interest.
An agent will give you much-needed advice, like whether it’s wise to waive that contingency, and they’ll ensure that the seller and listing agent aren’t taking you for a ride. Based on their connections within the industry, they may even be able to find out information about the competition and the offers you’re up against.
Offer an all-cash deal
If you don’t need to apply for a mortgage, your offer will usually jump to the top of the pile during the bidding war. The seller doesn’t need to worry about you running into problems with financing.
A cash sale saves time for everyone and can close much sooner because there’s no underwriting process to wait on. If the seller wants to sell their home as soon as possible, a cash offer is very powerful.
Drop your contingencies
Sellers don’t want to have to re-list their home and go through another bidding war because a contingency made the sale fall through. Contingencies are specific conditions that must be met prior to the sale being completed.
You can make your offer stronger by dropping your contingencies. This may be a good option for you during a bidding war.
Scott Vanderspek is a Surrey real estate agent who wants to help his clients and members of the community better understand the home buying process. Even once you have purchased your home, you can always reach out to Scott for advice.
If you are looking for a house for sale in Surrey, you can reach out to Scott to help you find your dream home. Have questions regarding real estate bidding wars? He can help you with that too.