Dos and Don’ts of Real Estate Bidding Wars

Dos and Don’ts of Real Estate Bidding Wars

Dos and Don’ts of Real Estate Bidding Wars

By Mark Spain Real Estate

Bidding wars are commonplace in competitive real estate markets. Whether it be a longstanding residential hub like Alpharetta or a growing metro like Atlanta, sought-after areas will see a surplus of home offers and, consequently, close bidding wars.   

If you want to buy a home in a popular market, you’ll need to prepare yourself for some competition. Luckily, the industry experts at Mark Spain Real Estate are here to help your offer stand out. With decades of real estate experience, our agents offer exclusive market insight into the home-buying process. With our help, you can enter a bidding war and come out on top! Read below for our dos and don’t of real estate bidding wars. 

Dos and Don’ts of Real Estate Bidding Wars

Do: Have Your Pre-approval Ready

Getting pre-approved for a home loan before extending an offer can help you stand out as a buyer. Taking the time to get your finances in order and secure a mortgage ahead of time will show sellers you’re serious about buying a home. It will also save you from elongating the closing process once your offer is accepted. Have your pre-approval ready if you're in a real estate bidding war.

Many first-time home buyers might confuse pre-approval with prequalification. To prequalify for a mortgage means you’ve undergone a soft financial overview indicating you’ll likely get approved for a mortgage after formally applying. Meanwhile, pre-approval means you have officially received a lender’s commitment to fund a loan of a specified maximum amount. For sellers, pre-approval carries a lot more weight than prequalification. Before beginning your house hunt in a competitive market, try to get your loan status squared away beforehand. 

Don’t: Include Too Many Contingencies

As a buyer, you have every right to include contingencies in your purchase agreement. However, you should keep them to a minimum if you’re house hunting in a competitive market. Contingencies allow you, the buyer, to walk away from the deal if certain expectations aren’t met, like poor house inspection or appraisal reports. Sellers might see multiple contingencies as a threat to the sale. To assure the seller that you want to move forward with your purchase, it’s best to waive as many contingencies as possible. Doing so will give the seller more peace of mind and allow them to trust you more as a buyer. 

Do: Write a Personal Letter

Though often overlooked by home buyers, attaching a personal letter to your offer can give you quite a leg up in a bidding war. Even if your bid isn’t the highest, a seller might accept your offer over others if you pull at their heartstrings. Sometimes referred to as a “love letter,” personal statements included in home offers showcase how serious you are about buying a home. In your letter, you might highlight sentimental reasons why you want to buy their home. 

For example, if the property has a vegetable garden in the backyard, you might mention how you can’t wait to grow produce once you move in. Little sentimental details like this can go a long way with a seller, especially one with a deep emotional connection to their property. 

Don’t: Overvalue the Listing Price

As a buyer, you might’ve never heard of paying above the listing price for a home. However, it’s more common than you would think in competitive markets. That said, don’t be shocked if you offer the exact listing price and still get outbid. When finding a home, make sure your budget can account for above the listing price. Though you won’t have to bid above the listing price initially, you might have to extend a higher offer to outbid your competition. 

Do: Pay in Cash

Cash offers are golden in real estate. From faster and more flexible closings to minimal financial risk and uncertainty, accepting a cash offer on a home is ideal for sellers. Offering cash if a great way to win a real estate bidding war.Even if your bid isn’t the highest, a seller might accept your offer over others if you pay in cash. However, if they do accept your cash bid, still be sure to have the home appraised and inspected before finalizing the sale. 

Don’t: Claim your “Best and Final Offer”

Many times in real estate, you might hear buyers extend what they deem their “best and final offer.” However, this isn’t a phrase you want to use in a bidding war. Claiming a bid as your best and final offer indicates to the seller that you’re done negotiating. In reality, this usually isn’t the case. Unless you’re 100% willing to lose out on a home, never tell the seller you’re not open to more negotiations. Using finite language might cause them to take your offer off the table and consider other buyers. 

Sell or Buy a Home with Mark Spain Real Estate

Are you entering a bidding war for a home? The industry professionals at Mark Spain Real Estate are here to help you come out on top! With decades of industry experience, our real estate professionals promise a seamless and stress-free home purchase! Check out our Guaranteed Offer Program for the potential to receive a competitive cash offer on your home in only 21 days. Contact our agents today!

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