Over the years, bidding wars seem to have increased manifolds. According to NAHB (National Assoc. of Home Builders), approximately 46% home searchers are found to have lost to bidding wars. The increase in demand is rather due to prevailing low mortgage rates and low housing inventories. Knowing some tips offered by the reputed real estate agent can help you win the bidding war.
5 tips to win the bidding war
The truth is, bidding wars tend to increase the asked price. It might be much more than the mortgage company’s appraised value while providing a loan. Funds will be desired to make payment for the difference. Otherwise choose under budget homes, where you have room for negotiation. You may also win the bidding war if you can shelve out 100% cash. Ask for details from your real estate agent.
Verified approval or Pre-approval letter:
When submitted with the bid will allow sellers to know about your seriousness. Pre-approval letters show clearly the amount approved. It is generally provided by the mortgage company after verifying your assets and income. This allows your potential seller to have great confidence in your offer. Thus, you can clinch the deal without much hassle.
Your offer to the potential seller should be accompanied along with a personal letter. Write a letter in a way explaining why you deserve to purchase their home. You can ask your real estate agent to help write an impressive personal letter. Some sellers prefer to sell their property to someone they think will take care of it as their child.
Assured closing date:
Identify a lender who can provide closing guarantee. Such guarantees do help the seller to be gain more confidence about the buyer’s intention and financial capacity. However, remember that not every closing guarantee is designed to be equal. A few mortgage companies might choose to pay flat fee in case your mortgage does not get approved at closing.
Your bid should include a time limit as it can help avoid altogether the bidding war. The experienced real estate agent recommends their clients to identify a recently listed house. Also sellers should be given about 4-6 hours time to accept an amazing offer. A good offer is sure to be accepted by the seller.
Therefore, with proper and timely guidance from your real estate agent, you are likely to win the bidding war and own a dream house.