Sparing in a Bidding War, Advice for Buyers
How Can A Buyer Compete with the Demand and Bidding Wars this Summer 2021
With the influx of buyers trying to snatch a piece of real estate they can call "home" this summer, it’s inevitable you may encounter a BIDDING WAR. Dun, Dun, Dun.
There are 4 things you can do to be more competitive while making an offer with the hopes of winning the seller’s heart — and wallet — over.
Ultimately, fate will always intervene — hope for the best and good luck out there!
To learn more about dealing with a bidding war in this market, feel free to contact me to talk through your buying options. Remember, not all bidding wars will result in winning the home, but you should speak to your Broker (me) and strategize what your financial threshold for bidding may be.
1) Purchase All Cash. The obvious option, but let’s dive deeper.
2) Co-Purchase. Typically this means teaming up with a family member with the funds OR having them gift you the funds. Alternatively when using familiar money you can also speak to an attorney about crafting a lending structure in which you pay back your family, with interest, instead of borrowing from a traditional bank. This can be sort of like an all cash purchase; if your family member has deep pockets.
3) Purchase a rehab property that needs significant upgrading or was an estate in which the home was not inhabited for some time. Because the home “ needs work”, this means you could potentially negotiate the price and then work backwards and shave off concessions once a home inspection is preformed and elements of renovation are revealed. Be careful about signing contracts with “AS IS CONDITION” and always speak to an attorney before committing to a rehab home.
4) Drop Your Contingencies
Submit an offer without any contingencies, such as a mortgage or home inspection contingency can help make your offer more attractive. This is not always recommended for rehab properties but with the right team, you can have all the research needed to proceed with confidence. An example of this would be a construction consultation from a design professional — like an architect — which can help you learn more about the structure’s feasibility. This zoning analysis will uncover if the home/structure has additional air rights to be extended. Extensions can allow for building additional square footage to the home. Once again, you should always speak to your legal counsel before committing to signing a contract without any contingencies. You should also meticulously go over the market comparable with your Broker to understand where the home may appraise for if you drop your mortgage contingency.
Thanks for reading, to learn more about your broker’s experience - Check out Teresa’s Recent Sales Transactions Here.
