(Spin Digit Editorial):- Mission Viejo, California Dec 21, 2021 (Issuewire.com) – Bidding wars have jumped in the past year–so much so that the National Association of Home Builders reported in May of 2021 that 45% of long-time home searchers hadn’t purchased a home because they continued to lose out on bidding wars. Real estate agents around the country have cited a mix of low housing inventories and low mortgage rates for the demand. If you’re among those battling for a house, here are 5 tips that may help you win a bidding war.
As an Orange County Realtor with over 30 years combined experience, Elmira Sonboli has assisted Home Buyers and Sellers in the Orange County Area with Low-Cost Realtor Services. With her wealth of knowledge, she has put together 5 Top Tips to win a bidding war.
1. Submit a pre-approval letter with your bid
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Pre-approval letters, or Verified Approval letters as we call them, help buyers show they’re serious bidders. These letters are a step above prequalification letters which state how much a lender may approve you for on a mortgage. That’s because they’re only provided after a mortgage company has verified information such as your income and assets. With this in hand, sellers may be more confident in your offer than another’s whose financing might fall through.
2. Add An Escalation Clause
What if you want to make a higher offer on a home but you’re afraid you’ll end up overpaying? An escalation clause can help you put in a higher offer only if you face competition on a home’s price.
Here’s how it works: Imagine that you want to make an offer on a house for $150,000. You believe that you’ll face competition for the home, but you aren’t sure how much your competitors are offering. Your real estate agent can write an escalation clause into your offer that says you’ll pay a certain dollar amount above any offer up to your budget limit.
In this example, you might offer to outbid any competing offers by $1,000 up to $155,000. This way, you can still outbid other buyers with your absolute best offer without offering too much money upfront. If you end up being wrong – and there are no other buyers interested in the home – you won’t spend extra money for no reason.
3. Be negotiable with contingencies
Contingencies are clauses buyers often add to contracts to protect themselves, but these can be hurdles for sellers. They can include stipulations that repairs must be made or that a home has to close on a particular day. You may stand out from the crowd if you’re flexible with these during a bidding war on a house. If you delay a closing date in a hot market, for example, sellers may respond favorably. You’ll be giving them more time to find their next home in the same tough market.
4. Add a time limit to your bid
This tip may help you avoid a bidding war altogether. Orange County Realtor Elmira Sonboli suggests finding a house that has just hit the market and giving sellers 4 to 6 hours to accept a strong offer. If your bid is too good to lose, a seller may accept it without waiting to hear from competitors. Bear in mind that your real estate market may vary.
5. Write A Personal Letter
Think about the amazing memories you’ve made in your current space. Most sellers love the idea of passing their home onto a buyer who will love it as much as they did. You can increase your chances of winning a bidding war by including a personal letter to the seller with your offer. This costs nothing but can leave a lasting impression on the seller. Use these tips to write a great personal letter:
- Include a few details about yourself. One of the biggest benefits of including a personal letter with your offer is that you can give the seller an idea of who you are as a person. Introduce yourself and your family in the opening body of your letter. This makes your offer more personal than just a set of numbers and can help the seller remember you when it’s time to choose an offer.
- Write about the property details you love. Did you instantly fall in love with the shape of the pool? Already envisioning yourself serving Thanksgiving dinner in the large dining room? Were you touched by the initials etched into the walkway? Let the seller know exactly why you want to buy their home.
- Explain your offer if it’s low. Use your personal letter to explain why you might be submitting an offer that’s on the lower end or below the seller’s asking price. This way, your seller knows that you aren’t simply attempting to lowball them. You never know which seller might sympathize with the stress of childcare costs or medical bills.
Good Luck in your Home Search
Your Orange County Realtor
Source :The OC Realtor