March 12, 2021
The Secrets to Winning a Bidding War
You’ve spent months looking for your dream home. Finally, you’ve found it. The house in the perfect neighborhood with an office and a yard. It fits your budget. You put in an offer. Unfortunately, three other people put in offers too. You’re in a bidding war. What do you do now?
Don’t panic. Take a deep breath and consult the experts. Real estate agents and home builders in Greenville, SC, understand the importance of finding the perfect balance between winning the bid and sticking to your budget. Here are some trade secrets to winning a bidding war without breaking the bank.
- Get Their Attention with Your Pre-Approval Letter in Hand.
A pre-approval letter is a statement from your lender showing that you’ve been pre-approved for a home loan. Sellers love to see a pre-approval letter for many reasons. First, it shows them that you are really serious about buying their home. Secondly, sellers like a quick sell. The approval process can sometimes take days or even weeks. Third, having pre-approval for a loan helps to reassure the seller that the deal won’t fall through at the last minute. Make your offer stand out by taking care of those concerns from the start.
- Find an Expert You Can Trust.
Custom homes in Spartanburg, SC, are in high demand. The best way to beat out the competition is to have an experienced realtor at your side. These agents have been in the trenches of the housing market. They can advise you on when to go full in or when to hold back for a better option. Look at online reviews or ask for referrals from friends and family. Choose an agent with a proven track record of winning bids.
- Inside Information Ends the Bidding War Before It Begins.
Talk to your favorite home builders in Greenville, SC, or meet with your real estate agent. These professionals have insight into homeowners’ needs and wants. Ask your realtor if they can contact the listing agent of the home you’ve chosen. Find out what the seller wants. Do they want to take certain appliances with them? Are they hoping to skip replacing stained carpet? Make as many accommodations as you can. When you make the seller happy, they’ll put you at the top of their list.
- Get to the Top with a Higher Offer.
Depending on the market and property’s location, upping the offer won’t mean busting your budget. Sometimes, even a small increase of a thousand dollars can make all the difference. However, discuss this option with your realtor first. Contact trusted Greenville and Spartanburg home builders to get more information on the value of homes in the area. You do not want to overbid for the value if housing in that area is in decline. Most importantly, never ignore your budget. You don’t want to have a mortgage you can’t afford.
- Knock Out the Competition By Increasing Your Down Payment.
Maybe your budget can’t stretch to increase your offer enough to catch the attention of the seller. That’s okay; you can still make an impression by increasing your down payment. A higher down payment also lowers the amount you need from a loan.
In a bidding war, sometimes the home price can go above its appraised value. Banks won’t lend out more than the home’s current appraised value. A higher down payment can help you stay in the game. Keep an eye on your budget and don’t forget about fees and closing costs. You don’t want to get to the end of your budget before getting to the end of the deal.
- Stay In the Game with an Escalation Clause.
If you know this is the home you want, go all-in by adding an escalation clause. What is an escalation clause? It is a clause that ups your offer by a certain amount each time you are outbid. You can put a cap on the amount you’ll bid. Let’s say you’ve found your home priced at $200,000. You can spend as much as $220,000, with enough budget left over to help with closing costs. You know the property is a steal and probably has a lot of interested bidders. You place a bid of $200,000 and tell your agent to increase your offer of $200,000 by $1,500 until you reach $220,000. This helps you outbid other offers without going over budget. Some realtors frown on this option because it could show sellers how much you have to spend. In a tight market, it could get you the home you love.
- Shut Down the Competitions with a Cash Offer.
Cash isn’t an option for every home buyer, but it can win you the home. Paying in cash cuts away a lot of red-tape and speeds up the process. makes the deal go quickly. You don’t need an appraisal, a bank loan, or other contingencies. You’re able to lower a lot of risks for the seller and get the deal done faster. A cash offer, even if it is lower than other bids, can put you at the top of the list.
- Skip the Contingencies.
In any home deal, there are a list of “If, then” agreements. If the sink doesn’t work, the seller will fix it before the buyer moves in. If the buyer doesn’t get the loan, then they can back out of the deal. Get rid of as many contingencies as you can, but remember, this takes the risks of the deal off of the seller and places it on you. You could end up buying a home that needs more work than you can afford.
- Don’t Be Afraid to Get Personal
A short, heartfelt letter can make a big difference to the seller. They’ve put a lot of love and effort into their home. Tell them a little about yourself and your family. Let them know why you love their home. Tell them your plans for the property. It could make all of the difference.
Whether you are buying or building a house in the Greenville, SC or Spartanburg, SC areas, bidding wars can pop up. Navigating the housing market can be confusing. Reach out to the experts at Enchanted Homes. We have over 15 years of experience building beautiful custom homes in Spartanburg and the surrounding area. Call us today at 864-895-0601 to get started on your dream home.