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Trulia Washi…, Other/Just Looking in Charlotte, NC

How can you ensure you'll come out on top in a bidding war?

Asked by Trulia Washington DC, Charlotte, NC Tue Apr 30, 2013

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These are some crazy times and you may not want to come out on top in a bidding war. Obviously you're paying at least list price and it's best to go in with your best and final offer to start. Cash, very generous earnest money deposit (which you could lose) and then start removing contingencies. Scary, you don't really want to be removing contingencies but the faster the seller can call it a contract and not a contingent contract, that's where the seller wants to be. Do the home inspection prior to contract if the seller allows which you'll pretty much use for information purposes. Remove the appraisal contingency...that's usually always something the seller likes to see...but do you really want this place that much? Let your agent guide you and remind you of foolish mistakes.
0 votes Thank Flag Link Wed May 1, 2013
Love the question - and unfortunately there is no "one size fits all" answer! Ask your realtor to find out as much as possible about the seller's situation, their motivation, their time frame. Some sellers feel particularly attached to their home and want to sell to someone who will love it as much as they do. My buyers wrote a letter to the seller this weekend in order to win a bidding war.

Do they want to move quickly or slowly - Do they need time to find a home of choice. Some buyers let the seller stay in the house for an extra month or two - rent free - after settlement to give them enough time to find a home of choice.

Assuming that you do not have the good fortune to be able to pay cash for your purchase - get your financing in order in advance of your offer. Use a good reliable lender - preferably one that the listing agent knows. Do not go for a loan that is problematic or might involve conditions which would impact the seller - like a VA loan. Put down 20% if at all possible.

In short, put yourself in the seller's position and try to find out as much as possible about the seller - then craft your offer to meet the seller's wants, needs, and wishes! Good luck - let me know how it turns out!
0 votes Thank Flag Link Tue Apr 30, 2013
I must agree with Tony's advice. I'd also suggest one very important item. Listen to the advice of your Realtor. I had this had this very conversation with a fellow agent today. Buyers fell to allow us to do the very job they've hired us to do, assist them with purchasing a home. That involves more than showing a home and presenting a offer. Many agents have experienced both sides of a agent transaction from the listing and buyers side. With that being said they have a clear understanding how a strong offer should be written and presented. I can't say that you'll come out on top everytime, however I'm certain that you'll at least have a fighting chance by taking this simple advise.
0 votes Thank Flag Link Tue Apr 30, 2013
Unfortunately its no way to guarantee success in a bidding war. But here are a few steps you can take to increase your chances.

- Remove as much emotion from the purchase as possible.
- Make an all cash offer if you have cash available.
- Make a larger earnest money deposit. If your closing costs are going to run you $5000, then consider a $5000 earnest money deposit.
- Increase your offer price. A property here in DC was recently listed for $239k and sold for all cash for $325k.
- Remove contingencies in your contract such as appraisal contingency or appraisal contingency but be careful as these are meant to protect you.

That's just a few ideas. I have many others so feel free to contact me if you need any further assistance.

Tony Taylor "DC Real Estate Guy"
0 votes Thank Flag Link Tue Apr 30, 2013
This is a tough but important question!

More money in the offer is NOT always the best way to go.

A cash transaction usually looks good to a seller. I have had sellers that don't want to worry about Lenders and how strict they can be.

Work with your agent about contingencies and time frame the Lender needs to close. This is where an agent can use their expertise to minimize contingencies and time to settlement.

I hope this helps! Good Luck!

Beth Seifart
Keller Williams Realty - Leesburg, VA
0 votes Thank Flag Link Tue Apr 30, 2013
Know what the seller wants.
Remove or avoid the obstacles to the seller succeeding.
For each seller, the wants are different.
Too often, they are all treated the same.
-
Just like there is no Gaurantee, there also is no ensure when bidding on a home.
That's why the outcome is more predictable when experience is on your side.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
0 votes Thank Flag Link Tue Apr 30, 2013
Interesting question.....

Many people assume the key to success when involved in a bidding war hinges on the largest amount offered....make no mistake, this is very important but there are other ways of "sweetening the pot" without throwing more money at the transaction. Here are several things to consider:

1. Cash deal....sellers will often consider taking less when a cash transaction is involved

2. Quick Closing....truly motivated sellers often appreciate the opportunity for a quick exit

3. Minimal addenda....special considerations scare sellers. Don't go there!

4. Minimize your repair limit....have a thorough inspection and make sure you have wording that allows you to exit the agreement without penalty should repairs exceed a specified limit.

Hope someone finds this information helpful.

Respectfully,

Bill
0 votes Thank Flag Link Tue Apr 30, 2013
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