Make sure your dream home doesn’t slip away
- Increasing your offer price isn’t the only way to stand out
- Know when to walk away—just because you can buy it doesn’t mean you should
- If it comes down to price, Home Savi can help!
It’s not uncommon for homes to sell at or above asking price, especially in hot markets. While increasing your offer price is one way to win a bidding war, other factors can affect the seller’s decision as well.
Beyond purchase price, a seller may be motivated by convenience or even emotion. If you’re in a competitive market and are looking to buy the home of your dreams, here are some tips on how to come out on top when there are multiple offers on the seller’s table.
Get your financial ducks in a row
Before you engage in a bidding war, it’s crucial to be pre-approved for a home loan. Sellers want to see commitment from the buyer and getting pre-approved is an excellent way to show that you’re serious about purchasing a home.
Be careful not to bid much higher than the market value of any property. If you're using an escalation clause that automatically increases your offer in response to other bids on the property, be sure to set an upper price cap and a limited time frame.
However, just because you can outbid other buyers, doesn’t mean you should. If the final home price is significantly higher than the appraised value of the home, your home loan could be put in jeopardy. Be disciplined and know when to walk away from a bidding war, or it may just cost you in the long run.
Reduce the hassle
Sellers care about convenience. Generally speaking, the fewer contingencies on your offer, the better. Try to reduce contingencies, but also know when to stand your ground. For example, never waive your right to a home inspection. You don’t want any surprises once you’ve committed to the transaction. Your goal is to find a balance between making the sale as efficient as possible and mitigating your risk level.
Use the power of emotion
Sometimes, cash isn’t king. Sellers like to feel good about the people buying their homes. It’s in your best interest to be as cordial and likable as possible throughout the entire home buying process. Refrain from being overly demanding or critical of the home or its owners.
Personalize your offer by attaching a letter about why you love the home you’re attempting to purchase. Include pictures of your family or a relevant personal story if possible—you never know what could strike a chord with the seller. Make the seller feel good about their home and even better about you.
Home Savi can help!
Our contracts are designed to put you in control of your savings. One useful way to use your savings is to up your offer price by the amount you're saving in commissions. Essentially, this could allow you to increase your offer price by 3% and outbid competing offers. For example, on a $500,000 home with multiple offers on the table for that asking price, you could offer $515,000 without actually paying more than someone offering $500,000 through an agent. In a competitive market, this puts you at a huge advantage.