6 Tips to Win a Bidding War When Buying a Home

Couple holding house keys

Post from MilitaryByOwner

Don’t let the terminology alarm you. Although a bidding war sounds like an aggressive shouting match causing your face to go red and the vein in your neck to bulge, it’s really not. But it’s understandable why you’d think so.

There’s a lot of stress associated with selling and buying a home. All parties are potentially working with strained, and sometimes different, timelines and emotional attachments. The seller may not want to leave the memories behind while the buyers may have already fallen in love with the property. Not to mention that anytime finances are involved, people tend to become more sensitive.

Add those factors with the burden of direct competition on the buyers and it’s no wonder that the idea of a bidding war brings anxiety. But, a bidding war actually looks more like a calmer, slower, quieter auction. The seller clearly has the advantage with two interested buyers which forces you, an interested buyer, to get creative in persuading the buyer to sell their home to you and not the other person. But how do you do that? How can you win without going outside your reasonable means?

1. Offer cash.

As with most financial transactions, cash is considered less risky and faster than other forms of payment, and a home sale is no different. Obviously, buying a home is far more expensive than, say, buying furniture. So paying for a home with cash is considered a bit of a luxury.

If you can’t offer all cash, then consider bringing cash to closing to help fill the gap between the appraisal price and the sales price to your down payment

2. Limit contingencies.

Contingencies and conditions can mean more work or risk for the seller, and if they’re motivated to get moving, then they may not want to spend their time or money jumping through hoops. So, if the only difference between your offer and the other buyers’ offer is a particular contingency, then it’s likely they’ll choose the one without it.

Needless to say, this isn’t the time to ask for the seller to pay for closing costs or make an offer contingent on the sale of your own home.

3. Be flexible on closing.

As military families, we’re often forced to work with strict timelines. Dealing with short-notice PCS orders can leave families in a frenzy to sell or buy a home quickly. Find out if a short-notice move is motivating your sellers. If you’re able to close quickly, you might be able to win against a higher bid with a longer closing period.

4. Consider renting back to the sellers.

If the sellers listed their home early to ensure a sale before their PCS but aren’t actually ready to move out yet, you might be able to win the bidding war by offering to rent the home back to the sellers.

This only works if you don’t need the home right away, for example, if you’re using househunting leave prior to your PCS and won’t actually make the move to the area for a few more months.

5. Write a letter.

One surefire way to help you stand out from other interested buyers is to share your story. Sure, writing a letter isn’t unique in itself, but your personal interest is. Many home sellers are attached to their property. When they reflect back on all the memories made in the space, they can’t help but hope that the next family to move in will make their own memories to cherish.

If you can convey your love for the home and share your vision of making breakfast for your kids in the kitchen, opening presents Christmas morning, and gathering in this home that’s perfect for you and your family, then you might appeal to the sellers’ emotional side.

6. Don’t be afraid to walk away.

Though it won’t help you win a bidding war, being able to walk away will help keep you from making a poor financial decision. If winning the seller’s acceptance would mean breaking your budget, then you’d only be losing if you won. Even if you love a home, it’s not worth the extra strain of overspending. Walk away and see what other homes are on the market. Chances are, you’ll find another one to love!

Are you ready to find your new home? Get connected with other families near military installations on MilitaryByOwner to find a home that’s right for you. And if you need help finding a real estate professional in the area, be sure to check out our business directory.

Show Full Article

Related Topics

Home Ownership