How to Win a Bidding War

Multiple offers: two of the scariest words a real estate agent can say to his or her home-buying client.

When you aren’t the only person interested in purchasing a particular house, no matter what type of market we’re in, the seller suddenly has the upper hand in the negotiating process and there is a real possibility you may not get that house you so badly want.

I have been seeing a lot of multiple offer situations in the Boise and surrounding markets and a lot of disappointed homebuyers. To ensure that you aren’t among those ranks, here are some tips to fight – and win – a bidding war.

Get Pre-Approved for a Loan

It’s always a good idea to go into the home purchase process knowing how much you can afford to spend and having a firm commitment from a lender to loan you that amount of money.

When there is the possibility of multiple offers on a home, that pre-approval letter may be what puts your offer ahead of others. An all-cash offer will trump a pre-approval letter, but you are miles ahead of an offer under which the buyer still needs to qualify for a loan.

Know the Market

When you find a home that you want, and there’s the possibility that yours may not be the only offer the seller receives, the first thing to do is to determine the current market value of the home. Yes, this may be vastly different from the amount the seller is requesting. Your real estate agent can easily supply you with this figure.

How does this help you in a bidding war? By knowing how much the home will appraise for, you also know exactly how high to go on an offer to purchase. Anything above current market value is fantasy land for the seller, as no bank will lend more than what a house is worth.

So, if you find yourself in a heated bidding war, this information serves as your stopping point in the process.

Submit a Clean Offer

The fewer contingencies you include in your offer to purchase, the more attractive it is to the seller. Of course you never want to waive your inspection contingency, but if you really want the house, now is not the time to be picky and ask for multiple concessions. Your financing commitment, few contingencies and an offer of market value for the home will place you ahead of the pack.

Feel free to email or call for more information on how to purchase the home of your dreams in Boise.