The weather is breaking and the days will be getting warmer. However, the temperature isn’t the only thing that will begin to heat up. Spring and summer months are peak months in the real estate market and if you’re looking to buy a home soon, you may find yourself in what real estate experts coined “a bidding war.” Currently Philadelphia is a sellers market meaning the inventory is low but this doesn’t mean you can’t land your dream home. All it takes is savvy bidding and a little patience. Here are 5 easy steps to survive a bidding war.
When it comes to most purchases you find what you like, lay down the cash or credit and return home a happy camper. Understand real estate is a totally different animal. It is not uncommon to find yourself on the loosing end on multiple bids if you’re not prepared. Buyers often times get frustrated after being outbid and end up signing a contract that doesn’t suit them just to end the process. Be patient. Don’t sign a purchase agreement that doesn’t align with your original budget and terms and let your agent work for you.
In an age where texting and emails are considered valid methods of communication, create a personal touch. Go the extra mile and write a personal letter to the seller with a brief statement on why you would love to be the new owner . Just like most people develop a personal relationship with personal items such as clothing, cars and pictures, home owners usually develop a deep bond with their home. Tap into those emotions and make a connection. Even if your offer may be lower than other bids, the seller just may favor your offer knowing you will appreciate and take care of the home.
In many cases potential buyers deposit Earnest Money which is money placed up-front to show good faith. Now say the Earnest Monet set amount in your market is $10,000, it may be in your best interest to exceed that amount buy an additional $10,000. Not only does it make your offer stand out it also show your desire to purchase the home weed out the not so serious buyers. It is not uncommon for sellers to accept lower offers from buyers who put up a higher amount in Earnst Money.
As a buyer you never really know the intentions of the seller. They may may or may not be in a hurry to sell but never assume either way. If you plan on entering a bid for a home you want be aggressive with your timeline on such things as inspection and closings. The owner just very well may be in a hurry to sell and even if your offer is potentially lower than other offers, the seller just may favor your bid because your inspection may be a week before the others. Shortening your contract timeline shows you’re desire for the property and at the same token reduces the seller’s risk.
Pre-approvals although non-binding are great tools to show just how serious and qualified a potential buyer is. So work with your agent to obtain a pre-approval from a reputable lender. If you end up in a bidding war a pre-approval may make or break your offer. Working with a lender who has a strong reputation in your local market will give you a leg up when competing against an offer which may appear to be identical on the surface.