With the real estate market heating up, bidding wars seem to be more prevalent with each day. While we all dream of a smooth and carefree transaction, with the low volume of desirable houses on the market, you may very well find yourself in the middle of a bidding war. So before you go into battle, let me suggest a few ways to suit up and prepare.
First things first – Get a great pre-approval letter from a reputable lender. You want to make sure that your offer has staying power. Nothing is more heartbreaking than to think you have won only to find out there was an issue with the loan approval.
This one is just as important – Get the right agent! You want to choose an experienced and local agent who is well-versed in the area you are looking to buy in. The right agent will have all the right contacts and will make sure that they find the right home for you!
No one likes surprises – Take time to learn the market in the area you wish to buy in. It's important to educate yourself on the prices of the homes you are looking to buy. There should be no sticker shock when it comes to buying a house. Make sure you have realistic expectations and know your true ceiling.
Ok, you have gotten a solid pre-approval letter from a great broker, found a fantastic agent and you have done your research and now you are ready to go!
Remember, your agent is your local real estate expert. It is vital that you discuss the pros and cons of each property with them. Take notes on all the properties that you view. Write down what you like and don't like about each. Keep your agent up to speed as you eliminate properties on your list or re-prioritize your favorites. Don't get caught in a moment of excitement and then change your mind in the morning.
So now you have found the perfect home and you are ready to proceed. What next? Now, you want to find out if there are any competing offers. If there are none, you still want to make a reasonable enough offer to be considered right away as you never know when another offer may come in. Your agent can help you determine the value of a home based on recent neighborhood sales.
If there are competing offers, then you need to decide whether you still want to proceed knowing that there will be uncertainty and a fair amount of stress. If you find out that there are multiple competing offers be prepared to offer at least list price and in many cases even higher.
The bottom line is that you need to feel comfortable with your offer. I always suggest applying the $1000 test. That is, if another buyer is willing to pay $1000 more, would you be ok with walking away from the house?
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