One of the realities of the Boise real estate market is that it is very competitive. Tons of new buyers and low inventory has led to plenty of homes receiving multiple offers and triggering a bidding war. The common conception in a bidding war is that the highest bid always wins. However, this isn’t always the case. There are many times where the right bid is the winner. Here are 5 ways we have found that can help you secure the winning bid in a bidding war, despite not having the highest offer.
As with all real estate transactions, talk to your real estate agent about the best course of action for your specific situation.
Get pre-approved for a mortgage
If you have followed our blog here or on our main site, you’ve seen us reference getting pre-approved many times. That’s because it’s one of the most powerful tools to making a serious, powerful offer—even before the COVID-19 real estate boom. Pre-approval is one of the first steps you should take in the home buying process. When you are pre-approved by a lender, you will get a letter stating that you are approved to get a loan for a certain amount of money. This letter shows that you are qualified for a loan and that your offer is more serious than buyers who are not pre-approved. If your offer is surrounded by buyers who are not pre-qualified, it can help yours stand out.
Put more cash forward
The phrase “cash is king” applies very well in real estate. The more cash you can put forward, the better your offer looks to sellers. This can come in the form of a larger down payment, earnest money, or covering some or all closing costs. Alternatively, you can provide an all-cash offer. This is very attractive to sellers because there is no financing contingency, escrow closes faster, and there is no need for appraisals. If you are able to have an all-cash offer, that is one of the best ways to secure the winning bid.
Related: Even all-cash offers can experience financing problems
Have a flexible timeline
Offering flexibility to the sellers is a great way to make your offer stand out. If the seller needs more time to buy a new home and move out or needs more time to get their own affairs in order, giving them some extra time can help them consider your offer. Our agents have successfully negotiated extended closing windows and even free rent back to the sellers in order to help them get everything sorted out. If you aren’t on a hard-and-fast moving deadline, offering that you the sellers can help you come out on top.
No matter what the financing looks like during a real estate transaction, there are contingencies. The most common are financing, appraisal, and inspection. Contingencies are in place to protect the buyer in case something goes wrong and allows them to back out of the transaction. Buyers can do away with certain contingencies in order to speed up the closing process and look more attractive to sellers. It is important to note that eliminating contingencies puts the risk of a low appraisal or necessary repairs onto the buyer instead of the seller. That is why this is often a winning strategy: the seller has less to worry about. If you want to eliminate contingencies, make sure you are prepared to absorb the cost of anything that may turn up during or after the sale.
Write a personal letter
Also known as a “love letter”, this is a way to show the sellers how their home is a perfect fit for you, and that you will take care of the house as well as they did. This letter should ideally contain compliments on the condition of the house, recent renovations, and how well it complements your own lifestyle and needs. This does not guarantee you will win the bidding war, but sometimes a well-written personal touch is enough to be the tiebreaker to get the sellers to pick your bid over the others.
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