Right now, over half of all buyers are facing bidding wars in their offers. Most home buyers cite being outbid and low inventory as the top two reasons they have not bought a home yet. While this is amazing news for sellers, it means home buyers must be more strategic than ever.
What Can Home Buyers Do?
Stay on top of local listings and schedule showings ASAP
Get pre-approved for a mortgage- this step saves valuable time and allows buyers to realistically approach listings
Be prepared to bring extra funds to the closing table in the event that the appraisal does not meet the purchase price of the contract, appraisals are not keeping up with price appreciation found in this unique market
Know when to walk away- if the bid for the house overshadows its value consider finding another property in which you are paying for the value not to beat someone out
Write an offer letter that stands out- buyers are more inclined to choose buyers who have appealed to them personally, to read our blog about writing the perfect offer letter click here
Work with a realtor who can provide you with options and will #WorkHardForYou
What Can Home Sellers Do?
When listing, establish goals and what you want the selling process to look like
Work with a realtor/firm that can effectively market your property to generate interest
Look at the whole picture- who wants to buy your property and what is their situation? Do they have a similar deadline? Are they pre-approved? Asking these questions can help deduce if they are the type of buyers that you are looking for
Personalization matters- if a buyer takes the time to reach out and explain why they are the perfect fit, this should be taken into account when assessing bids
Pay attention to contingencies within offers as they can hold up the closing process and negate the buyers perception of the property’s value
Ensure buyers have sufficient funds to pay above the appraised value and use the addendum which waives the right to terminate if the appraisal does not meet the value- commitment to the contract price is more meaningful than the price itself and very well could be lower than the highest offer
While we don’t know for sure how long bidding wars are expected to be this prevalent, it is important the buyers and sellers alike are aware of the real possibility of getting into a bidding war and what the best course of action is for them.