In a recent post, we discussed ways savvy sellers can be the biggest winner in a bidding war. But strategies for this situation aren’t limited to sellers; if you’re on the other side, finding yourself one of multiple buyers bidding on the same home, there are ways to make yourself come out on top.
After all, once you’ve finally found the house you want, you want to do everything in your power to get your offer accepted—short of offering more money than you can afford. Here’s how to come out on top:
The first—and arguably most important—factor when it comes to standing out and winning the (bidding) war is your mortgage; even more specifically, your mortgage broker. Hiring an experienced mortgage professional is crucial because it means having everything done right and done in time. Sellers need to know that everything is in place, and that you can actually get the loan on the home, once they accept your offer.
So if you’re working with someone who has properly prepared you, and the competition is not, you’re going to be the best choice. And if you’re the seller’s second choice, and the first choice falls through due to mortgage issues, you’re going to need yours to be perfect.
Sell the Seller
You’re already convinced that you want that home; now you have to sell yourself to the seller, convincing him/her to choose you. This means giving them what they want/need most. For example, if they are moving out of town or into a new home that’s already in contract, they’re going to want to get their house sold quickly. You can move up in the ranks by removing contingencies and offering a fast, seamless sale. Remember, sometimes it’s not only money that talks.
Clause and Effect
Obviously you don’t want to overpay—and you really don’t want to overextend yourself. But most buyers have a maximum amount in mind, a number they’re willing to go up to in order to make the deal. You can put in what’s known as an escalation clause, which states that maximum number when there are other offers. To protect yourself, it’s important the clause also states that your max amount can only be slightly higher than the highest competitor’s bid. For instance, if your top amount is $650,000, and your competitor only goes as high as $629,000, you don’t want to pay more than $630,000.
Once you’ve got the winning strategy, and are ready to take on the competition, you’ll be poised to be the seller’s top pick.