|Posted on May 29, 2014 at 11:45 AM|
Your first steps should be to consult with your Realtor, and make sure you have a full understanding of your parameters whether you are financing or paying cash. You will formulate a plan of attack with your Realtor, and consider your options. But in today's market, very often you will find your self in a bidding war. Whether it is because of price, neighborhood, or size, if you are interested, so are others.
Some of my clients have been suprised to hear that it isn't just always about the highest bid.
Here are some other techniques and considerations that can help win the bid for you:
Solid financing: You may be competing against cash buyers, so make sure that your loan preapproval is in place and that you have completed all required documentation other than identifying a specific property.
Eliminate contingencies—carefully: If you own a home now, you may want to offer to buy another home without making your contract contingent on the sale of your current home. You take the risk of carrying two mortgages for a while, so make sure you can safely handle the payments. You can also decide to have an “information only” home inspection rather than making your offer contingent on the outcome of the inspection.
Make the settlement date convenient for the sellers: Rather than negotiating on a closing date that’s convenient to all sides, you can tell the sellers you’ll work with their schedule or rent back the property to them after the closing.
Offer to pay all closing costs: You can reduce the sellers’ out-of-pocket expenses by offering to pay their share of the settlement fees, but before you do this get an accurate estimate of what those costs will be and make sure you have the funds available to pay them. In many cases, this may be less than $1000-$1500. If you are neck and neck with another bid, that could be the deal breaker.
Personalize the transaction: Sometimes the tipping point for sellers who receive multiple offers is something emotional rather than financial. A personal letter describing your love of their home may tilt the scale in your favor.
Try an escalation clause: You can add an escalation clause to your offer that increases your bid by a certain amount above other offers. Just make sure you sent a limit on how high your offer will go.
Control yourself: Remember that any offer is subject to an appraisal (unless you waive that contingency, but that’s not recommended unless you have plenty of cash), so be careful not to bid above the market value of any property.
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