How to Win a House Bidding War?

Here is how you can enter or win a house bidding war and make yourself stand out over other buyers.

1. Get Pre-Approved, Not Just Pre-Qualified

A mortgage pre-approval is one of the most efficient things in your cake. Whereas obtaining pre-qualification is merely an opinion of what you may be able to afford, pre-approval is a confirmed promise by a lender.

When sellers observe a pre-approval letter they understand that you are financially equipped to make the deal and therefore increase your chances of making a better deal since you are better and a more reliable business.

2. Make Your Best Offer First

Starting low and negotiating up just does not always leave much room in a bidding war. Opening with your best offer in mind would be an assertive step in telling the seller that you mean business.

One should find out the price of the home based on recent market data and be prepared to make adjustments near the asking price, but a little more, in the event of a stiff competition.

3. Minimize Contingencies

Otherwise you may suffer delays in the process as contingencies such as inspection or financing clauses protect you as a buyer. When a multiple-offer situation is present, the sellers would want cleaner deals.

Think about reducing schedules or not insisting on the insignificant contingencies to sweeten your proposal but remember to be satisfied with what you are risking.

4. Add an Escalator Clause

Escalation clause is an automatic increase in price in case another buyer offers more than you, up to certain amount. This has the ability of keeping you competitive without always relying on the renegotiation. eg. $500,000, plus a step of $5,000 to a maximum of 520,000.

5. Be Flexible With the Closing Date

Occasionally it may be more than just the money. A flexible closing date or even a rent-back agreement on short-term basis can make your offer sweet especially in cases where the seller may require some more time to get out of their house.

6. Write a Personal Letter 

Putting a personal touch to the things might appeal to the seller- particularly those with an affection towards the house. Write an emotional letter stating why you love the place and how you feel by living in that house. It just needs to be sincere and not long.

7. Work With an Experienced Real Estate Agent

Bidding war The biggest asset you have in such a scenario is your agent. Experience agent can make offers, negotiate, and present them intelligently and inform of other offers. Select an agent that has a good track record in competitive markets.

Final Thoughts

To win a house bidding war, the best thing to do is to be prepared, decisive and at times a little bit creative. Most deals depend on how well you prepare yourself to do it though being pre-approved, offering a competitive price, having as few contingencies as possible, and working with a knowledgeable agent are the best ways to increase your likelihood of winning.

Finally, it is best noted that yes, it is significant to win but it is more significant to have a deal that you feel comfortable with, not only in terms of feelings but also with the risk of costs.