When homeowners hear that their home is now part of a bidding war, they get excited by the prospects. When you enter a bidding war on a home, there will be factors that don’t necessarily include money. The important part is to keep in mind is that you don’t want to pay more for the home that you can afford. Here’re six ways to win a bidding war without going over your budget.
1. Know what you can afford before entering a bidding war
Deciding that you’re ready to buy your first home is going to be one of the most important choices you will have to make, and it comes with massive financial risks. If you don’t already know how much house you can afford. If you aren’t careful, you can easily get sucked into spending too much money and wind up going over your budget. When you are in a bidding war, submit your best and final offer early on.
2. Speak with a listing agent
You can put an offer on a house, but if your agent doesn’t make the effort to speak with a listing agent, your offer may not stand out among the other offers that are on the table. An agent can receive 12 emails about a property he listed and their agents never followed up. However, when they do follow up with the listing agent, they were able to talk about all the questionable variables and come to an agreement. Conversations between agents make all the difference.
3. Propose a short closing
It’s always a good thing to find the seller’s motivation for selling. Perhaps this could be they are relocated due to a new job. This type of seller is probably highly motivated to sell and will be open to beingable to close within a couple of weeks, rather than months. You can make this happen by tightening your inspection time frame. Also, when a buyer is preapproved or has a conditional approval from their lender, it can speed things up exponentially.
4. Rent the home back to the sellers
This might sound a little strange, but it isn’t uncommon. Some sellers aren’t interested in a short closing because there is no pressing need for them to move. Perhaps they are interested in a long closing or something more flexible so that they have time to find a new home. By giving the previous owners the option to rent the home while they solidify their next dwelling can go far into not going over your budget.
5. Submit an “as-is” offer
When you have fewer conditions on purchasing a home, the more attractive your home will be to owners. Consider putting an offering to purchase a home in its current state. You can choose to forego conducting any inspections, which could be pretty risky. Perhaps instead of going without an inspection entirely, try limiting them to a few days. It’s only recommended that you waive the inspections entirely if you have an idea of what could be wrong with the property and understand the costs associated with them.