From keeping a vigilant eye on your market to knowing when to opt out of a war altogether, here are the essential tips you need to conquer the bidding war.
For most agents, encountering some degree of bidding wars this spring and summer is inevitable. Here are some tips for success from those who have battled in those wars first-hand.
1.) Be realistic about market conditions and have a strategy
For buyers to stand a chance, they’ll need a well-informed agent who’s really willing to bat for them. Know the pulse of your market, get mentally prepared, have conversations about what you’re willing to give in advance of looking at any properties.
2.) Make sure your financials are in order
In a multiple offer situation, sellers will almost always immediately rule out a potential buyer with anything less than solid financing in place.
3.) Consider a ‘walk and talk’ inspection
Buyers who fall hard for a property might be tempted to waive the home inspection. But most agents advise against that unless their client is financially secure enough to deal with the potential fall-outs.
An effective alternative is what some agents call a “walk and talk” or “walk-through” inspection, where an inspector comes with the potential buyer to a home showing in order to poke around for any glaring issues. This helps the buyer mentally prepare for unexpected costs, but also doesn’t take up more of the seller’s time.
4.) Plan out escalation clauses and appraisals
With escalation clauses, buyers will offer to add a certain amount on top of other offers that come in, typically with a cap on how much they’re willing to pay.
But, agents also expressed caution in creating such clauses because, particularly as bidding wars get more and more heated across the country, those escalation clauses can potentially run into issues with the home making appraisal… Still, in some markets, an official home appraisal seems to be less imperative during these times.
5.) Don’t neglect the back-up offer
With buyers having to make decisions about properties so quickly, it’s not out of the question for a winning bidder to have second thoughts. Being a back-up allows those potential buyers to avoid the hassle of having to duke it out with other buyers again if the deal falls through and the property is put back on the active market.
6.) Know when to opt out
Once the competition gets heated, it may be tempting for some buyers — especially competitive types — to want to duke it out until the end. But it’s best to know when to say when. And for some buyers, the risks of continuing to push at the boundaries of their own comfort level may not be worth it.
