It’s not uncommon for listings to attract multiple offers in a hot market. Many sellers even price their homes just under market value in an attempt to attract attention and get as many offers as they can, which can effectively drive up the selling price.
However, if you’re on the other end of this situation as a buyer, it’s not exactly fun. In fact, it can be downright intimidating and frustrating. If you find yourself in this precarious position, here are some ways to increase the odds of you being the winning bidder.
Go in with a Pre-Approval
Sellers typically want to know that they’re dealing with qualified buyers before they spend any time and effort entertaining any offers. As such, they generally like to see buyers come into the offer pre-approved for a mortgage. This is especially true in a multiple bid scenario. In fact, if you come in without a pre-approval letter from your lender, you can realistically count yourself out.
Include an Escalation Clause in Your Offer
You can strengthen your position in a multiple offer situation by inserting an ‘escalation clause’ in the contract. Basically, this clause states that you are willing to bump up your offer up to a certain point if other buyers come in with higher offer prices that trump yours. It’s a great tactic to use in these cases because it shows the seller that you are really interested and very serious about buying the house. It also keeps your finances safe by placing a limit on how much you end up spending on the purchase.
Go Light on the Contingencies
The most attractive offers to sellers are those that have little or no contingencies on them. The sooner the deal can close, the better, and a limited number of contingencies can bring that date closer. If you are competing with others, consider limiting how many contingencies you put in your offer, such as giving your lawyer a few days to look over the contract, or making the deal dependent on the sale of your home. Instead, stick to those that are really necessary to protect you.
Offer All Cash
If you’re fortunate enough to have the finances to support an all-cash purchase, now’s the time to use your money to your advantage. Offering the sellers all-cash in a multiple bidding situation will give you the upper hand against the other buyers, and boost your chances of coming out on top.
Be Prepared with a Deposit Check in Hand
Not only does the size of the deposit matter, so does your effort to provide these monies in the form of a certified check or money order at the time of the offer presentation. Having that check in hand at the negotiating table shows the seller how serious you are about making and finalizing a deal.
Be Flexible with the Closing Date
The more flexible you are to working around the seller’s needs, the more attractive the offer will be. Many things on an offer are negotiable aside from the offer price, including the closing date. Let the seller dictate when closing should be (if it works for you) to help sweeten the deal.
Write a Letter to the Seller
You can always write a letter to the seller describing how much you love the home and why you believe you are the right buyer. When all else fails, this tactic can help tug at the emotional strings of the seller and paint you in a positive light.
Bidding wars are rather common in Los Angeles considering how hot the current market is. What you need is an experienced, professional, competent real estate agent who is well-versed in the luxury real estate realm in L.A. and surrounding areas in order to ensure a successful transaction. If you are ready to buy or sell in L.A., contact our experienced team of real estate experts today!
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