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Trulia Dallas, Home Buyer in Dallas, TX

How can you make sure you come out on top in a bidding war?

Asked by Trulia Dallas, Dallas, TX Tue Jan 22, 2013

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I have to chuckle. Being on top could mean winning the bidding or it could mean getting the right house for the right price.

If it's just a matter of winning the bid, the answer is pretty obvious. If you go to auctions and watch bidders there, most are not ready in their minds to go with the highest price they're willing to offer. So, what happens is the price creeps up and people often make foolish decisions they regret later.

In an auction situation, I always tell my buyers to figure out what the maximum dollar amount is going to be and if the bid gets to $1 over that, they will drop for sure without any doubt. When we have that number, we're ready.

Of course, tactics play a role in the game of bidding. You can shut out a competing bidder by leapfrogging his bid by a larger increment than he is ready psychologically for. Most people have 10% or so maximum bid step. Any raise larger than their bid step will cause them to pause or drop out altogether. If you know your buyer's point of pain, you can suggest how to close out bidding.

If you play poker, you'll recognize the psychology of closing out - it is similar to bluffing. You make the opponent think he can't beat you. Large raises early could be a bluff, or it could be a winning hand.

There is nothing worse than having the opportunity before the auction to "buy it now" and the buyer rejects making an offer at that price, but during the bidding they go way over it. It is disheartening. If that happens, you know they didn't think it through and give you their highest price (point of pain). Live and learn.

Remember, winning the bid isn't everything, especially if the buyer has remorse afterwards. But if you know their point of pain, then winning the bid below their point of pain is also a win for getting the right house at the right price.

Deal me in!
Web Reference: http://www.SumnerRealty.com
2 votes Thank Flag Link Sun Jan 27, 2013
There are no gaurantees since you don't know what someone else is offering so go with your best offer. However make sure you have the financial backing by getting pre approved by a loan officer in writing.
2 votes Thank Flag Link Tue Jan 22, 2013
Many factors come into play when it becomes a bidding war. Bottom line is don't fall in love with something you cant afford. Many instances emotions get in the way... vs. what is "real for a purchase"

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1 vote Thank Flag Link Tue Jan 22, 2013
Use an experienced agent who knows the market well and LISTEN to him. Your chance will be much higher. Good luck.
1 vote Thank Flag Link Tue Jan 22, 2013
You can't.

Kenny
Turtle Creek Realty
1 vote Thank Flag Link Tue Jan 22, 2013
I am going to use a current client to shed some light we sent in two full price offers an were told by listing agent they have many offers please send us your "best and final" we stood pat because that was her comfort zone . I told her that we would probably not get the house but waned to her to know that and guess what we did not on either. Point being don't do anything youare not comfortable with and the last few weeks that is happening a lot is the old supply aand demand. there are no givens suggest 1% or more ernest money no seller contributions and above all a agent that knows there stuff. By the way we executed a contract today third time the charm good luck!
0 votes Thank Flag Link Sun Jan 27, 2013
Give the seller what they a asking for ;)
0 votes Thank Flag Link Sun Jan 27, 2013
I would agree with everyone and add that you ask your broker/realtor if they have experience with multiple offers. They can be tricky. Keep your emotions out of it and stay focused on the price that fits the market.
0 votes Thank Flag Link Wed Jan 23, 2013
One thing that hasn't been mentioned yet, is that it isn't always about the price. Of course the profit is key to the seller, but there are a few other factors.

For example:
1) Are you pre-approved for a mortgage, or better yet, can you pay cash? - An offer is only as good as your ability to follow thru with said offer!
2) How FAST can you close? - Do you need to sell your current property before you can close on a new one? Or do you have cash in your account and can sign as soon as the title work comes in?
3) Do you need assistance with closing? - If you are trying to win a contract, the less you ask for, the better. In a buyers market, most sellers will be willing to help pay closing costs, title charges, home warranty, etc. If you don't need those things and its a sellers market, don't ask for them!

These are just a few other things to keep in mind when trying to prepare the best offer possible. As a buyer's agent I look at all angles to make sure we are preparing the very best offer we can, but as the other agents mentioned, there is no definite way to insure you come out on top. All you can do is put your very best offer in front of them and hope it looks as good to them as it does to you!
0 votes Thank Flag Link Wed Jan 23, 2013
In addition to all the great answers posted here, it is very important for the buyer to identifying their top price before bidding commences. Buyers must know what the subject property is really worth and as one of my colleagues stated, don’t get emotionally tied to the property. Bottom line: have a max amount you will bid, don't over-pay and be ready to walk away!

Happy Bidding!
0 votes Thank Flag Link Wed Jan 23, 2013
I agree with most answer here that you just have to give your best offer and hope for the best.
0 votes Thank Flag Link Tue Jan 22, 2013
Trulia - you should know the answer to that question: All you can do is go with your highest, best and cleanest offer. And that still does not guarantee that you will come out on top.
0 votes Thank Flag Link Tue Jan 22, 2013
THe only thing you can do either a HUD or Mulit Bids on a Listing is to offer your "best and final". Your agent will get the results. You are using an agent I assume I know you are in a HUD but if on a normal listing ?
0 votes Thank Flag Link Tue Jan 22, 2013
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