Updated: Feb 28, 2021
Bidding wars can be brutal, and it becomes disheartening to lose out on property after property. As your buyers' agent, Whit Harvey can help you navigate this stressful process.
Step 1. Mentally Prepare
Many buyers enter today’s market with unrealistic expectations that can easily cause them to lose a bid on a dream house. Many buyers enter the transaction looking for a deal and maybe even wanting to offer $10,000 or $15,000 below list. It’s just not that market anymore.
Having prequalified letters and making sure buyers understand the value of speed are all keys to winning a bidding war. You need an agent who will remain on top of the process at all times.
Step 2. Arrange to Meet Listing Agent In-Person
Your agent should schedule an in-person showing, exchange cards with the listing agent and follow-up the same day.
If emails and calls go unresponded, most of the time that means the listing agent already has three other offers in their in-box. Your agent should go to their office, grab a coffee and give them your offer in person.
Step 3. Ask Targeted Questions
Price isn’t always the winning factor in a bidding war, but having the right information at the right time helps.
Agents who ask the listing agent questions discover new ways in which to craft an attractive offer. The sellers may need time or an option to rent back the property for a few months while their new construction home is completed. Or maybe they’re looking more for a firm deal than a higher price.
Your agent should ask the listing agent targeted questions such as:
· What are the sellers looking for in terms of a closing date?
· Is there negotiation room for repairs?
· How long has the seller lived in the house?
· How many offers have been received to date?
Step 4. Drop Contingencies
Foregoing conditions may not always be feasible, popular, or in the best interest of buyers, but removing any barriers to a close can heavily influence a seller’s decision over who ultimately wins the offer. Your agent can advise you on contingencies such as inspections or move-in dates.
Step 5. Offer Highest Bid Upfront
Your agent should ask you, “‘At what price are you willing to lose it” If you would be willing to lose a $850,000 listing at $890,000, then offer $892,000. In a hot bidding war, there’s only one chance.” While some buyers will say, “Let’s present this offer and then see what they say,” all too often the seller has already awarded the bid to a higher offer.
Step 6. Raise the Deposit
Offer larger deposits as a means of demonstrating greater interest to sellers.
If someone puts down $1,000 versus $10,000, who looks more serious? Remember, just because a seller has an offer doesn’t mean it’s sold.”
Step 7. Escalation Clause
If offering your highest bid makes you nervous, have your agent draft an escalation clause. This kind of clause states that you, the buyer will beat any offer by 1% up to a certain capped amount.
The Whit Harvey Group agents are skilled negotiators, responsive to requests and meticulous about the process. Whit will make sure that your offer in a bidding war is in your best interest, and hopefully that of the buyer!