How Do You Win a Bidding War?
This means war!
No, we are not talking about some cataclysmic geopolitical event. It’s much more personal—it’s a home buying bidding war. This spring’s home buying market is likely to be historical in the sense that extraordinarily high demand will significantly outpace the record low supply of inventory. That is going to lead to bidding wars.
With every new or unique life event you may face there are often those willing to offer advice on how to handle it. So, how do you win a bidding war?
Most experts have buyers, faced with the possibility of a bidding war, setting their absolute maximum price and then looking for homes priced less than that maximum to permit them to have some room to fire a couple of shots in that bidding war. With home prices already inflated by demand that usually means potential home buyers accepting that they are likely going to be paying more for less house than they expected. Not the most exciting of places to be.
Obviously, the biggest advantage is coming into the fight with cash. It is enticing to sellers and means quick closings. But there are not many buyers that find themselves in that position. Another suggestion is a heartfelt appeal to the sellers. Selling a home can be emotional. When considering similar bids, knowing a little about the buyers and knowing their home will be well cared for could be a deciding factor. But that appeal won’t likely overcome any significant financial difference in competing offers.
Most potential home buyers don’t have the cash to buy a home. When financing, some take the less-than-wise advice of submitting an offer and waiving the financing contingency—but that contingency is the only thing protecting the buyer if they can’t get a loan approved by a lender. Choose the wrong lender and any cash submitted with the offer could be lost if the loan doesn’t come through.
While foregoing the financing contingency is never a good idea, choosing the right lender is excellent advice. Embrace’s fully underwritten Approved to Move™ program and our Guaranteed On-Time Closing offer can distinguish a home buyer’s offer from other offers. It is as close as you can get to being a cash buyer.