How to Win a Bidding War in the Metrowest Market
One of the most stressful situations in home buying occurs when other buyers are competing for the home you want. To make an offer on the perfect house only to find out you have entered a bidding war is certainly nerve wracking!
With a shortage of homes for sale in the Framingham area, particularly in the low to mid range, bidding wars are becoming more common. Loosing out on a home you fell in love with is frustrating to say the least.
To that end, I’ve put together some tips for how to make a multiple offer situation as successful as possible.
Choose a real estate agent who is well organized and responsive. Don’t get overlooked because your agent didn’t communicate with the seller’s agent in a timely manner.
Get your pre-approval letter in place before making an offer. You may have a strong offer to submit, but if you can’t back it up with proof you are qualified to purchase the home the seller will move on. Use a lender that communicates effectively with all parties, I have several that I recommend!
Offer more than the asking price. Your agent should do a comparative market analysis to give you a good idea on the home value as soon as you decide to make an offer. If it’s not too out of line with the CMA or your budget, offer more than the asking price.
Keep your offer clean and simple. Don’t ask for contingencies that aren’t necessary to closing the transaction. However, I almost always recommend doing a home inspection.
Shorten the inspection period. Asking for a 5 to 7 day inspection period instead of 10 lets the seller know that you aren’t going to waste anyone’s time. Find a home inspector who has availability to schedule your inspection as soon as your offer is accepted.
Include an inspection threshold in your offer. For example you could say you’ll pay for the first $2,000 of needed repairs found on the inspection. Since you have the right to walk away from the home after the inspection with no questions asked setting a threshold of repairs you’re willing to tackle yourself tells the seller you’re serious about the house and you won’t walk away for a faulty light bulb.
Have your escrow check ready. Offer an escrow deposit that sends the message that you are serious about your offer and have the funds ready to turn in as soon as your offer is accepted. You need to include a copy of your escrow check with your offer.
Offer flexibility with your closing date. Convey through your offer that you are willing adjust the closing date to suit the seller’s needs.
Include a personal letter. Let the seller know who you are, what you like about the home, and that you intend to take good care of their former residence. Let them know what it is about the home that has already made it special to you. Additionally your agent can submit a letter stating that your are well qualified and serious about the house.
Consider an escalation clause. Let the seller know your offer isn’t the highest you will go by including a clause stating that you will increase your offer, up to a set price, if the seller shows you a higher offer from another buyer. Make sure an attorney reviews your offer to ensure you are protecting your interests.
Be diplomatic with negotiations after your contract is signed. Remember that the seller has other interested parties to fall back on. Always be respectful of the seller and the home. If you have repair requests after the inspection make them reasonable.
