You’ve just seen the house of your dreams and you’ve already determined the perfect spot where the flat screen and your favorite chair for watching the tube are going to go, as well as the dining room table … until … you learn someone else has put in their bid and it’s a lot higher than yours. Now what do you do?
No reason to panic, or throw in the towel, that’s for sure as there are some simple tips to help you possibly win the bidding war without overspending. Who knows you could find yourself enjoying your new purchase and hanging a home-sweet-home sign before you know it!
1.Be sure you know what you can actually afford
Unless you know beforehand exactly how much house you can afford, you might easily find yourself spending much more than you should. Your lender or financial adviser can help you determine what that number is. Go in knowing exactly what you can afford, and how high you can go without breaking the bank. You should also submit your bid early rather than wait; but this won’t guarantee someone else won’t come along. However, often times a seller will remember the first bidder who may or may not have made a good first impression and take that into consideration.
2.Talk with the listing agent
You can put in an offer, but unless your own agent takes the time to speak with the listing agent, your offer, in a multiple offer scenario, will probably be lost. Be sure to hire an agent you are comfortable with, who works for you and with you every step of the way.
3.Propose a shorter closing
It’s always best to find the seller’s motivation for selling if possible. Maybe they just accepted a new job across the country, or they are getting divorced, or perhaps they lost their position at their company. In any of these cases, the seller is probably highly motivated to sell fast. Buyers can also be preapproved, or even better, get a conditional approval, from their lender. Going through the mortgage process first allows you to close just as fast as all-cash buyers do.
4.Rent the house back to the sellers
Some sellers aren’t interested in a short closing. In fact, the opposite might be true. Sellers who don’t have to sell quickly but who are making a change to their lifestyle, like downsizing or upsizing, might want a long closing or some sort of flexible deal to give them time to find their new home. Being able to rent back the property to the seller for a few months while they solidify their next purchase can go a long way into not needing to overbid on the property.
5.Submit an as-is offer
The fewer conditions you put on negotiating the house price, the more attractive you look in the seller’s eyes. Consider offering to buy the house as-is. Also, think about opting out of conducting inspections and/or waive the inspection altogether, decrease the inspection period to two days maximum.
Armed with these tips, you just might be able to outbid your competition and proceed with buying the home you set out to buy before someone else got in the way!
