Blog Home » General » How to Win A Bidding War

How to Win A Bidding War

 

It’s a dangerous game to fall in love with a home, because once your heart has settled on it, another party can easily swoop in and take your true love. Intense and heated bidding wars are common in a buyer’s market. During this war, you must be equipped with the knowledge on what your seller is searching for in a buyer. Here are a few strategies to keep in mind should you find yourself on the front lines.

 

1. Avoid it

 

Perhaps the easiest way to win a bidding war is by avoiding it in the first place. 

 

“Ask your broker to see if the sellers have a price in mind that would compel them to call off the bidding war,” says Lisa Larson, a broker at Warburg Realty in New York. She says the seller may respond to a bold, preemptive offer.

 

It’s a strategy that has worked for Tracey Hampson, a real estate agent at Realty One Group in Valencia, CA.

 

“I always like to speak with the listing agent and simply ask what's important to the sellers,” she says. For example, they may need a 45-day escrow or want to keep the washer and dryer. Sometimes it really is that simple.

 

2. Secure your pre-approval letter

 

The pre-approval letter is your heavy artillery during this heated conflict, which is not to be confused with a pre-qualification letter. A PQL means that a lender has evaluated your creditworthiness and has decided that you probably will be eligible for a loan up to a certain amount. The pre-approval letter, however, details that an underwriter has inspected your information and the lender is ready to offer you a mortgage. If you have this at the ready, you will probably be removed from the bottom of the dusty pile of other qualified buyers. 

 

3. Money talks

 

“Cash is king, and all-cash offers hold a lot of weight in a bidding war,” says Brian Morgan, a licensed associate real estate broker at Citi Habitats in New York.

 

If you can’t afford to pay cash, Morgan says you need to make the down payment as large as you can.

 

“It’s another sign that you are serious and have the ability to afford the property," he says.

 

“Contract deposits are typically 10%, but a buyer could offer to put more on the line,” says Robert Rahmanian, co-founder and principal at REAL New York. “This move reduces the risk to the seller while increasing the risk for the buyer because they stand to lose more money."

 

Finally, you can impress the seller by offering more than the asking price. Rahmanian recommends the strategy of offering slightly above an even number.

 

"For example, if the asking price is $400,000, instead of offering $402,000, offer $402,350,” he says.

 

4. Enlist a good agent

 

It’s something you don’t want to embark on alone. That’s why it’s so important that you enlist an experienced agent, emphasis on the experience. 

 

“Choose your agent wisely and make sure they have a good reputation with other agents,” says Macowicz. “Trust me, the agent can make or break your deal."

 

6. Get personal

 

If you truly are in love with the property and are confidant that love conquers all, even bidding wars, then write a personal letter about why you are the best candidate for this home. Some real estate agents are against this compassionate move. 

 

Morgan says it can certainly tip the scale in your favor.

 

“In the letter, tell them how much you love their home and that you look forward to spending many happy years there,” he says. “Don’t be afraid to compliment their property, but be sure to be sincere.”

 

If the offers are similar, Larson says a letter can help you stand out in a crowd of bidders. 


Perhaps the one piece of artillery that will have you win the bidding war is the power of words and your deep passion. 

flags


CONTACT

  • Lydia Eskenazi PA

    Director of Real Estate Sales
    Harding Realty, Inc.

  • TELEPHONE

    +1 (305) 785-0440 Direct
    (305) 682-9051 Fax

  • OUR LOCATION

    9473 Harding Avenue
    Surfside, FL 33154

Terms / Privacy / Accessibility ADA