Bidding War Tips: Do’s and Don’ts for Homebuyers
Home shoppers need to up their game if they are going to buy a house in today’s housing market, where shoppers vastly outnumber homes for sale.
Not only do you need to marshal as much cash as you can, but you also need to be among the first to respond to a new listing, showing up with your mortgage approval and bank statements in hand.
You need to be flexible on timing and terms, but you also shouldn’t make any promises you can’t keep. So think long and hard before waiving your appraisal, mortgage or inspection contingencies.
Here are some home shopping tips …
- Get your financing preapproved: Sellers don’t just want to pick the bidder offering the most money. They want some assurance they’re picking a buyer with the financial ability to close. Give sellers as much confidence as possible in your financial ability by showing up with a pre-approved loan. That means pre-approval up to a certain amount. Click here to get Pre-Approved and learn about Stanford Mortgage’s Buyer Protection Guarantee.
- Become tech-savvy. With homes flying off the market, the early bird gets the house. That means having me set you up for notifications on new listings and then acting quickly.
- Have me guide you with creative strategies for winning bidding wars. Experience matters.
- If there is a reason a Seller may want to sell to you versus another buyer, share that information. While Fair Housing is the law, and discrimination is illegal, a Seller may choose a Buyer as long as that choice is not for discriminatory reasons. An example might be a Buyer who will live in the home versus an investor. A Seller may choose a First Time Buyer or a disabled veteran because they want to help that buyer. The highest offer may not be the “best one” in the eyes of the seller.
- Broaden your horizons. Consider homes that need some refurbishing. Expand your search to include more neighborhoods. With the possibility of working from home, consider a longer commute.
- Do not waive an inspection contingency. Doing so means you’re required to buy the home or forfeit your deposit even though you find something horribly wrong, like a cracked foundation or costly safety or mechanical defects. If you feel you have to waive this contingency, invest in a pre-inspection before you make your offer so your bid reflects the cost of repairs.
- Do not waive your financial contingency, unless you are already fully Pre-Approved. It is also important to retain your appraisal contingency unless you are making a very large down payment. Doing so could mean forfeiting your deposit if your mortgage doesn’t get approved.
Great info., Ron Thanks.