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August 22, 2013

7 Best Strategies to Prevail in a Bidding War

hands reaching up to grab a house key in a multiple offer situation of charlotte nc real estate and charlotte nc homes for sale by showcase realty
 
 

“Will I get

a second chance?

Will the seller

counter my offer?”

hands reaching up to grab a house key in a multiple offer situation of charlotte nc real estate and charlotte nc homes for sale by showcase realty

Many real estate markets are experiencing higher buyer demand than supply. In Charlotte, N.C., we currently have a 5 ½ month supply of homes; less than a 6 month supply is considered a Sellers’ Market. A good house in this market will likely receive multiple offers. Follow these strategies to prevail in a bidding war.

 

1.     Submit your highest and best offer as soon as possible. I am often asked, “Will I get a second chance or will the seller counter my offer?” Probably not, the Seller will likely negotiate with the best offer and reject all others. So, if you really want the home, submit your best offer up front.

2.  Keep your offer clean and simple. If you don’t need closing costs paid by seller then don’t include that in your offer. Don’t ask for personal property. You can always ask for small things later, and wait for the home inspection to ask for repairs. Pay for the home warranty yourself; they are inexpensive (typically under $500) and not worth losing the house.

3.     Have your agent call the Seller’s agent to ask why they are selling. Price may not be the priority; it may be speed, flexibility or a certain closing date. Unless you ask, you won’t know what the seller will consider the most acceptable offer.

4.     If you are able, submit the offer not subject to it appraising. This is a volatile market and appraisals are subjective, not scientific. Without this, there is a better chance the deal won’t fall out and the seller won’t have to worry about negotiating the purchase price later.  However if you plan to finance, make sure you can pay the difference of the appraised value and what you agreed to pay for the home, since your lender will only give you a loan up to the appraised amount.

5.     Write a personal letter to the seller, unless the property is bank or business owned. Tell the seller why you want the home and how you will enjoy certain features.

6.     Submit complete paperwork. This includes the contract, pre-approval letter and earnest money check. If possible, include a preapproval letter from a reputable lender with the property address on it.  A certified check is better than a personal check for the Earnest Money Deposit, and it should be higher than the standard for your area. This shows good faith and your commitment to buy the property.

7.     Your offer should be higher than the list price.  It should be as much as you think the home is worth plus a few dollars. Or you can offer to pay $1,000 more than the highest offer up to a certain amount. Interest rates are low right now so this additional amount over 30 years won’t amount to much.

Use these strategies to put your best foot forward.

Good luck!