So, you’ve found the home of your dreams after responding to a seller’s creative real estate listing. As the listing stated, it has the perfect layout, a large backyard, an open floor plan, and nice appliances. Most importantly, it is within a price range you can comfortably afford. Your real estate agent does a little investigating and finds out some news you don’t want to hear.
No, the house isn’t already sold. But another issue that’s just as challenging is on the table – there are multiple offers. While you thought you had it on easy street, you may have to go into a bidding war with the other buyers interested in the home. So, how do you make your offer much more enticing so that you have a chance of winning.
Things To Do Before Preparing Your Offer
A bidding war can be risky. You literally will have to go high or stay at home. And, you may have to inherit a home riddled with problems, all to have the home of your dreams. So, before you start writing up your offer to beat all other offers, here are some things you should also do to prepare. Before you start trying to make an unbeatable offer on the house, especially if you’re moving to Carolina Forest, make sure that your lender covers your bare minimum.
Make Sure You Have a Pre-Approval Letter Ready
What good is it to make plenty of promises you can’t deliver on because you can’t afford the property you seek? Before you start trying to make an unbeatable offer on the house, make sure that your lender covers your bare minimum. This will tell sellers precisely what a lender is willing to provide for the home, giving them a sense of comfort that your offer is solid. If you purchase with all cash, make sure you present the bank documents proving you have the money to afford the home.
Be Ready to Throw In Some Extra Cash
Your lender will provide you with the money you need for the home, but it will likely be only what the house is worth. So, if the homeowner charges more than the house is worth, you will be responsible for paying the excess. Additionally, if several offers are on the table, you will have to go even higher than the homeowner is asking. So before you start writing your offer, make sure you have plenty of money saved in case you have to put in far more than initially anticipated.
Now How To Prepare The Offer
After you have prepared for all the possibilities, it is time to write the best offer that the seller won’t refuse. Here are some things to consider as you write your offer.
Ensure That Your Offer Is As High A Price As Possible
When there are multiple offers on a property, now is not the time to go in with lowball offers. But, on the other hand, you don’t want to lose lots of money in the deal either by giving more than the house is worth. So this is where you will have to make serious decisions. After all, there could be other houses on the market. While they won’t be this one, you don’t want to pour lots of money into what could be a financial nightmare.
Typically, your agent may suggest you go in at about one to three percent over asking. However, you may have to go upwards of about ten percent in a bidding war. Make sure you can afford this first and final offer you put in the house because you’ll likely be responsible. Your lender will only supply what the home is worth. Therefore, you will have to come up with the extra costs.
Do Away With Contingencies
Another thing you should consider is doing away with any contingencies, even a home inspection. Many home sellers know that a deal can fall apart if a contingency is not met. So, they may eliminate all of the offers with contingencies and only deal with those that don’t have any. So, to increase your chances of getting the house, you will have to ensure your offer doesn’t include contingencies.
Before you make such an offer, it is a good idea to be ok with such a gesture. Remember, with no contingencies, you are accepting the house as-is. So, if there are major issues like mold, asbestos, roof issues, worn appliances, or other problems that you aren’t aware of, you agree to accept these problems if you don’t include contingencies.
Provide Some Flexibility on the Closing Date
One way to scare off a seller is to start demanding their time. So while you have provided leniency in other ways, don’t start being demanding when it comes to them moving out. While your deal may look good in terms of your willingness to pay more and do away with contingencies, demanding that they move out quickly may make them consider other options. While you shouldn’t wait too long, you should at least provide them ample time in the offer to move out upon selling the home. Make sure that before you make such an offer, you aren’t on a tight deadline to move out of your existing place.
Sweeten the Deal With a Personal Letter
Do you want to know one thing your competition probably hasn’t done that could set you apart? They probably haven’t written a personal letter to the homeowner. So, along with writing a great offer, it is a good idea to include a letter that has a personal touch. This letter could explain to them why you want the house so badly.
Don’t use this as an opportunity to emphasize how desperate you are. Instead, try to write something that could touch their heart. For example, maybe you could talk about how their home reminds you of when your grandparents were alive and used to cook homemade cinnamon buns for a holiday in a kitchen set up like theirs. Or you could compliment them on the little details they made to the house that make it unique. Flattery may get you everywhere when it comes to buying. So, use it to your advantage.
Conclusion
The good news is that bidding wars aren’t very common. They happen more often in a seller’s market when inventory is really low, and the need for housing is very high. So, there is a possibility that you may never have to deal with a bidding war. However, if you should be presented with such circumstances, these tips will help you win.
This article was provided by Joaquin Miranda
