Some critical steps can give you a big advantage when planning a strategy of how to win a bidding war.
You’ve finally found the house of your dreams. There’s only one problem: you aren’t alone. Seems another family (or several) thinks your dream home is perfect for them, too.
Getting ready to make an offer on a home can be stressful even under the best of circumstances. But when others are also interested in the same property, your anxiety can skyrocket. You may now find yourself faced with a bidding war.
This is probably one of the scenarios people fear most when they are trying to buy a home. It can be intimidating, but there are things you can do to increase the odds that you will emerge from this battle victorious.
Consider these tactics to help you win a bidding war:
- Be the kind of buyer that sellers love.
- Know your bidding limits.
- Choose your contingencies wisely.
- Don’t miss your chance to bid.
- Try to make a personal connection.
Be the kind of buyer that sellers love.
Many sellers want to want to complete this process of selling their home as quickly as possible, with minimal headaches. If you have all of your financing and documentation in order before submitting a bid, you’ll have an advantage over less prepared buyers—and that just might be enough to give you the critical edge over the competition. If you are in the rare and enviable position of being able to make an all-cash offer, you will soar to the top of the pack.
Know your bidding limits.
Figure out beforehand what you can afford—and then be firm in sticking to that limit. Just as with any type of auction-type scenario, it’s easy to get caught up in the frenzy of competition once the bidding starts. The adrenaline rush and pressure may be compounded in this case because you likely have become emotionally invested in the house, maybe even already started picturing your family enjoying living there. But overextending yourself now will not start your life in the new home off on a good foot.
Choose your contingencies wisely.
Remember the part about being a headache-free buyer? Loading up the offer with a bunch of contingencies can stress out sellers. Contingencies can often protect you from risk or costly situations, so they are a wise move in some cases. Just try to use them sparingly.
Don’t miss your chance to bid.
If you truly are in love with a specific property, you need to move fast. Otherwise, you might miss your chance to submit a bid at all. Don’t risk losing out. If you submit a bid right away, you might even be able to seal the deal before other potential buyers even have a chance to check out the property. Even better, if you submit an early bid and are able to agree to a quick closing, you greatly increase your odds of being the lucky buyer.
Try to make a personal connection.
You may not have the chance to actually meet the sellers in person, but ideally, you or your agent can at least get a message to them via the listing agent. Write a note about why this house is so special to you. Be sure to mention your family, and the important moments and memories you hope to share in the home. Sellers are human, and many would love to find a buyer who will love the home as much as their own family did. If your offer is roughly the same as another bidder—or even if it’s a little less—this personal touch might tip the scales in your favor.