How to Win A Bidding War

How to win a bidding war on a home

See more of this beautiful home at ComFree.com

When there are less home sellers and high demand for housing, bidding wars become the norm in many areas. For buyers, this can be a stressful issue that comes with its own set of dangers, especially if you end up paying way too much for a home.

If you arm yourself with the right information, however, there’s a good chance that you could win a bidding war and go on to own to the home of your dreams without breaking the bank.

Here now are some tips on how to win a bidding war:

How to win a bidding war #1

Research the area

Understanding the area by researching the neighbours, schools, parks, demographics and the crime rate can give you an advantage regarding knowing the value of the location and can also be used as a great conversation starter with the seller.

Sometimes you may not like what you discover about the area, at which point, you would not bother with a bidding war. Assuming that you are happy with what you uncover, this is great information that will assist you in making a sound offer.

How to win a bidding war #2

Talk to your mortgage broker

Find out well in advance how much you can really afford to spend on a home; the last thing you want to do is win a bidding war and then discover that you won’t be able to make ends meet in the long term. Get your maximum amount, but don’t give away your cards to the seller off the bat.

How to win a bidding war #3

Do your pricing homework

Too often, home sellers deliberately list their homes anywhere up to 25% under market value with the intent of creating a bidding war. It is up to you to do your homework and find out what the real market value of the properties are in the area.

Remember that what a home sells for is not always what it’s actually worth.

How to win a bidding war #4

Get a home inspection beforehand

Oftentimes, homebuyers make an offer to purchase with conditions like having to sell their own home first or pending home inspection. If you want to to win a bidding war, have a home inspection done before you make your offer. This way you have one less condition and the home seller may give you preferential treatment.

How to win a bidding war #5

Avoid the fax/phone process

Even in this day and age of plugging in every minute of every day, there is something to be said about doing things in person. Avoid bargaining electronically and choose instead to be present when it comes to the negotiation process.

How to win a bidding war

See the rest of this beautiful home at ComFree.com

How to win a bidding war #6

Make a good faith deposit

Another way to win a bidding war is to make a good faith deposit of about 5% of the price to show that you are a serious buyer with the liquid to make the deal happen quickly. Use a bank draft and let their real estate lawyer hold onto it until the deal goes through.

How to win a bidding war #7

Place your bid late in the day

If you place your bid too early in the day, you give the seller time to generate other offers by using your bid as leverage. If you place your bid late in the day, however, that may not be the case and the seller will have a shorter window in which to generate other offers.

How to win a bidding war #8

Sell yourself

Even if they are selling their home, oftentimes home sellers care about who is about to take over their property and want to feel assured that they are handing it over to someone who will take good care of it. Explain to the seller how you plan on doing just that.

How to win a bidding war #9

Show some flexibility

Being a hard-hitter when it comes to making an offer is one thing, showing that you are empathetic and willing to be flexible regarding the home seller’s needs is another and will bode well for you. From closing the deal early and letting the seller stay in the home until they can arrange for their move to offering them an incentive to leave quickly, there is much to be said about a homebuyer who is willing to compromise.

How to win a bidding war #10

Make your bid

Sometimes sellers tell buyers that they won’t be accepting offers for a few days and designate a time at which you can submit your offer. Submit yours early on anyways; the seller will want to know what you’re offering and this may, in turn, be advantageous for you.

Win a bidding war every time

By knowing your stuff and walking into a home with full confidence, chances are high that you will be able to get the home you want and win the bidding war!

If you’re looking for the perfect home, visit ComFree.com today.

Rosy Saadeh

About Rosy Saadeh

Rosy Saadeh is a Social Media Manager and Marketer and spends her time scouring the net trying to make new friends, help clients and post interesting stories about real estate and the like in Canada. Connect with her on Twitter, Facebook, Google+, and Pinterest.

4 comments

  1. Rick S says:

    Great article. However, I have found that the best way to win the bidding war is to appeal to the emotional side of the seller. Write an introduction about the buyer: Do they have children, is this their first home, did they love the mural the sellers painted in the kids bedroom, etc. Sellers want to know that the people buying their home will enjoy it as much as they have. This little bit of difference has won many bidding wars for me.

  2. Sandra E says:

    What you say has some good points; however, I have been on both sides of the multiple offer situation more times than I’d like to have been. I can tell you that it is not always possible to get a home inspection in advance, especially when they do an open house one day and offer are at a set point in time the following day and you are one of 15 other offers.

    It also means your client has to spend $750 to $1000 for a home inspection on a property they might not win. This gets expensive if you have to go from home to home in bidding wars on every property.

    I have also seen people put their offer in early, and the seller still won’t look at it until the set day and time.

    The fact of the matter is, the best thing you can do is be well qualified, and know what you can afford, and then keep your offer inside those limits. The bank still has to do an appraisal, so going in with an offer that is not subject to financing is not necessarily a good idea. If the bank doesn’t appraise it for the crazy price you had to offer to get the property, you could find yourself having to come up with the difference between their appraised value and what you offered, in addition to your down payment.

    So the most important thing is, making sure your buyer knows what sales are in the area, and that they may have to pay a premium to get the house they really want, whether or not it makes any sense. They should be comfortable with what they offer first and foremost, then there are no regrets.

  3. Rosy Saadeh says:

    Hi Krysia,

    Thanks for your comment. Our readers requested that this article be written and perhaps if more people like you get wind of this information, things will begin to change in the market. Have a great day!

  4. Krysia says:

    An honest biding war is one thing, but to intentionally start one for personal gain is wrong. I found it very frustrating that the seller’s agent lowered the selling price the day I put my offer in “to encourage more offers,” hence tried to start a bidding war… When I told my agent I don’t stoop to playing dirty, I walked away from this…
    After reading “How to win a bidding war” Numbers 3 and 7 are examples of fraud according to the criminal code.

    If more people walked away from this sort of behavior – things would look very different.

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