You thought buying your dream house in this economy would be easy considering there are not many buyers in the market right now. But that’s not true. Recent trends show that there are more buyers in the market than you think and what can be your worst nightmare – you have to battle it out if you want to own the house of your dreams.
Identifying a bidding war:
You know a bidding war is on when:
- The house is underpriced and has attracted more buyers than expected.
- There are a few new properties up for sale and you bump into other potential buyers when you are checking out homes.
- The seller seems to take more time to react to your offer and responds by announcing the most dreaded words for any potential buyer-“There are multiple offers on the house”.
Gearing up for a bidding war:
Don’t hyperventilate if you are a first time buyer and you found out that a bidding war is going on over your dream house. Bidding wars can be frustrating if they go on for too long; at times, paying excessively for a property can go against you.
Follow these steps to prepare yourself for a bidding war:
Be 100% confident:
Shortlist all the houses which fit the bill. Bidding on 2-3 properties at one point of time doesn’t make sense. Instead, just be confident about the house that you like and put in all your efforts on closing the deal on the selected house with your broker.
Do a little research:
You can visit the neighborhood and talk to the neighbors to gauge if any houses have been sold in the recent past, the prices paid for them and other relevant details. This will give you a fair estimate of whether you are paying a fair amount or not. For all you know, you may be offering to pay a much higher rate just to out win the other bidders.
Don’t forget to carry out a home inspection:
Just because there are multiple bidders on a house doesn’t make the house perfect. Chances are the bidding wars may be fake; it could be an attempt by the brokers to hike the rates. Get a professional home inspection done to understand the health condition of the house.
Make an attractive offer:
After considering your finances, put forth the best possible offer which comfortably suits your budget and other requirements. Try to get a pre-approved loan, so that you know you not going overboard with the offer. If the seller is aware that you have a pre approved loan, he/she will have more faith in you as compared to other buyers who are not sure how they are going to fund their purchase.
Don’t get emotional:
If you keep referring to the house as your new home, you will struggle to remain objective when bidding for it. By getting emotionally attached to the house even before making the purchase, you are making yourself vulnerable and the seller can take undue advantage of you. Look at the situation from a logical point of view.
Bidding wars can be compared to gambling. If you don’t think logically, you may end up bidding for multiple houses out of desperation. The idea is not to buy an expensive house; the idea is to own the most luxurious house that you can personally afford.
This article is submitted by Jacob Lee. He is a real estate agent and a budding writer. He says nice new homes for sale have become pretty rare but not extinct, and the right kind of approach can help you get that.