First Time Home Buyer: The Bidding War
If you’re a first time Home Buyer, you’re probably nervous about entering the home buying market. It can be a little intimidating at first. When you search homes in the Hippest Hoods in Charlotte, you’re likely to find them disappearing within a day or two. You may even find yourself facing a bidding war.
But never fear! Buying your first home can be an enjoyable experience. And while you’re likely to face some stiff competition, outsmarting your rivals is easier than you think. So what strategies are most likely to give you a competitive edge?
Here are 5 Tips to Stack the Deck in your Favor…
♦ Have a seasoned professional on your side. Choose a Realtor® with solid experience in the neighborhoods you’re considering. The advantage to you is two-fold: we’re most likely to know about upcoming properties before they hit the market, and we’re most familiar with the strategies used in local bidding wars. That’s because we do this every day. Winning a bidding war is a subtle art form that evolves from spending a lot of time in the trenches. Align yourself with a Realtor® with a well developed instinct, and follow it.
♠ Be prepared. Get your loan pre-approval in place before you go home shopping. A great agent always includes it as part of your offer. It assures the Seller you’re qualified to buy. Waiting until you find a home you love is too late – it will get snapped up before you have a chance to start the pre-approval process.
♥ Manage your emotions. Keep your emotional toolbox within arms reach. Fall in like, but not in love with the home you’re considering. Don’t put your heart at risk when competing for a home. It could come back to bite you. The time to fall in love comes once the contract is signed. And if you’re one of those who are emotionally connected to winning at all costs, you’re probably going to miss your mark. Resist the urge to outmatch the other side. This mentality works against you with most home sellers. Insider secret: Most Sellers want to pass their beloved home on to someone they like. BE that someone.
♣ Don’t fear paying too much. You may have to bid high to win the contract, but keep the faith. The good news is that before your Due Diligence period ends, you’ll have an appraisal performed to establish a benchmark price. If it doesn’t appraise at the contract price, smart Home Sellers know that it’s better to renegotiate the purchase price with you. Placing the property back on the market as a failed transaction can devalue the home in the eyes of future buyers. Besides, the likelihood that it will appraise higher for a different buyer are slim. So think of this as protection in your back pocket. Even if you’re paying cash, it pays to have that appraisal done! So go ahead and take the risk and bid seriously if this is a ‘must-have’ home for you.
♦ Be open to a clever game plan. Winning the bid in a multiple offer situation is not always just about price. There are a number of factors that can tip the scales in your favor when competing with a buyer offering more money. It might come down to something the seller might need, or as simple as offering a much higher Due Diligence Fee – a good strategy that goes a long way toward giving the Seller confidence that you’re not likely to back out. There are plenty of creative strategies we might use to set you, the Buyer, apart from the crowd. Keep an open mind and go with it.
Keep your eye on the prize and be your strongest self. Choose a terrific Realtor®, and together, plan a solid strategy. If you don’t win the first bid, chances are excellent that the home that comes next is much nicer anyway.
❉ Refreshingly Honest Real Estate ❉
Jennifer Monroe, Realtor®/Broker
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© Jennifer Monroe, Realtor®/Broker 2016