6 Great Ways To Overcome The Bidding War Game
Check into real estate recently? Well if you have you probably noticed that the prices have gone up in most places and the market is now in favor of the seller. What does this mean for you? it means that even if you find the perfect home and offer the asking price you may not get the property, instead you may find yourself in the middle of a bidding war which is fantastic for a seller but as a buyer not so much. Below we'll show you how to avoid and overcome the bidding war and arm you with the tools to succeed in your hunt for a new home.
Lets Talk About Money
It all starts with you, the first step in your search for the perfect home is taking a look at your financial situation. Make sure there are no surprises in your credit rating, and take care of anything that needs to be taken care of and when that's done, it's time for step two. The pre-approval, getting pre-approved for a mortgage will prevent you from bidding to high on a home that doesn’t fit into your budget. Never leave your realtor out, and always keep them in the loop! they are there to help you find the perfect home to let them know what your down payment is and your pre-approval limit along with what sort of budget you want to work in. Normally the minimum down payment required is 5 percent but if possible try to increase that amount. Having the flexibility and the pre-approval status shows that you are a serious buyer and places you in an advantageous position, when it comes down to you and another party bidding roughly the same amount and you being the only one with the pre-approval status, chances are you will win the bid.
The Early Bird Gets The Worm; So Go See the Property ASAP
When you or your realtor have found a listing that is interesting and within your budget don’t wait! Schedule a viewing because the sooner you look at that property the better. The initial viewing gives you a chance to think about the property and if it’s right for you, It will also give you time to book a second viewing which will allow you to see things you may have missed on your first viewing.
Get It Inspected
It may seem a little pointless to have your own done because most sellers will provide you with an inspection list before the home even hits the market, but on a purchase of this caliber it doesn’t hurt to get your own done. Find yourself a reputable firm that you trust, if you don’t know of one don’t worry your realtor can help, and when the inspection is being conducted make sure everything is properly documented so you can refer back to the inspection when needed. On some occasions the seller will not have an inspection done so it’s your responsibility to schedule your own, and make sure it’s done before the offer date. Putting a home inspection on a bid might put you our of the running so have one done yourself so you avoid that risk and are aware of the purchase you’re about to make.
It’s Time to Spend
Once an offer has been accepted, it needs to be backed up with a certified deposit that’s usually 5 percent of the agreed purchase price. This payment is handed over to the sellers party on the day of the presentations so make sure the funds are secure in your account so the check doesn’t bounce. Being prepared and having the money in hand will increase your chances of winning the bid, even if others have offered more.
Do Your Research
With the help of your real estate agent you’ll be knowledgeable of the market. By doing a “Comparative Market Analysis” you’ll be able to see the prices paid for the properties that are similar to the one you are looking at. By analyzing the neighborhood based data you’ll be able to determine what’s the most likely minimum bid, from there all parties will keep bidding until one is accepted.
How Motivated Are You?
Are you looking for fun or are you looking for that perfect home? Have you found a home you just can’t live without or are you on the fence? Whatever the case may be it helps to hide your feelings from the seller, but let your realtor know how you feel. If this is the home of your dreams and you just can’t live without it let your realtor know so they can begin the process of calculating a bid that will likely win. All that being said some sellers are unrealistic about how much their home is worth and they end up pricing themselves out of the market, remember you don’t want to buy a home that is overvalued no matter how much you like it.