Tuesday, April 29, 2014 / by Nicole Solari
How to Win a Bidding War
All-cash sales comprised 33 percent of transactions in March, and with sellers reviewing multiple offers how can you stand out? Here are some quick tips to help you win in today's bidding battles.
- Make an offer quickly, the first day the property is on the market is best.
- Be open to programs like Docusign which can streamline the paperwork process.
- Bid like you mean it! Lowball offers are of another era, lowball a seller today and you might get nothing in response but a laugh.
- It's not all about the price. There is so much more to an offer than just the price - lots of terms, times, down payments, option monies, earnest money, favorite title companies, leasebacks, deposits, and so much more.
- Realize you may have to bid over the asking price in certain areas.
- A Competitve Market Analysis might not show you the whole picture. Basing your offer on homes that sold 6 months ago will get you nowhere in this quickly changing market.
- Consider interest rates. If you continually loose bids and interest rates go up 1-2% this year, how does that affect overall what you may pay for the house over the next 30 years. If you pay $305,000 for a $300,000 house, you might pay $5000 more today which financed might be another $35/month. If interest rates rise 1% that might mean another $250/month. Which is better for you. If you don't understand interest rates and FV and PV functions, ask your lender to run scenarios for you or explain it to you. (Do this before you find the house, don't waste time after you find the right house.)
- Bid odd numbers - $600,015 seems ridiculous but you never know it might win you the bid.
- Use a local, reputable, well-known lenders. If at all possible, if the lender can underwrite your buying power before you bid, include that information in the pre-approval letter you submit with your offer.
- Offer to close quickly. Don't make a seller wait for 30-45days.
- Put down more earnest money than the competition to let them know you're serious.
- Offer to pay some of the closing costs a seller might typically pay. Pay for your own survey. Pay for your title insurance. Pay HOA transfer fees. These little things really make a difference to sellers.
Most importantly, make sure you're working with a top notch realtor! Can they show you homes the 1st day on the market? Can they prepare offers immediately after you see them? Are they giving you the tips above? If not contact me today at 707-486-5400 or email@example.com