Although they are not wars in the ordinary sense of the word, bidding battles between prospective buyers who want one and the same property or home can become really tense. This is even truer when losing the bidding war means losing the home of your dreams – the perfect condo, single family home or townhouse.
Bidding wars may be a tense and unpleasant experience to a certain extent, but the specialists see them as a good sign – a sign that the housing market is become strong and active again. Anna Maria Andriotis from SmartMoney considers bidding war is found more and more often on rebounding markets, even when the buyer has to use a jumbo loan or to take a conventional mortgage. Fortunately, now you can ensure that a bidding war will end successfully for you by checking out the following strategies that are bound to help.
Preparation
It is a big mistake to enter the housing market without securing a proper funding beforehand. Whether the property you are after is sold privately or as a REO doesn’t matter, you will still need to show the seller some financial proof which you can obtain this way:
– Improve your credit score – it appears that 730 is the best credit score for mortgage lending and the closer to it you are, the less interest you will pay for your loan.
– Save cash – apart from your loan, you will need to make a down payment, which equals about 20%.
– Plan your budget – it may be tempting to bid more than you have, but there is no use in that, better be aware of your financial capabilities.
– Fair Market Value – you need to have in mind that many properties are discounted in order to be more attractive and competitive. It’s of no use paying much more than the fair market value.
– The best evidence that you are capable of buying the property (every seller will feel more assured when they see it) is a pre-approval letter for a mortgage.
The Best Offer
If you want to end the war successfully, you will need to make an offer that the seller cannot refuse. You need to use the fact that currently the situation on the market is advantageous for buyers and that the sellers know that. Here are some offer strategies that can win you the property:
– Agree with the closing date chosen by the seller.
– Try to cut your requests and conditions to a minimum – only things that you really need, no whims.
– Try offering odd numbers – $221,999 for example, because they stand out in contrast to the zeros.
– Make sure the liquid assets necessary for a hefty initial deposits are available.
Stay Calm
Too much enthusiasm and emotions may be an obstacle. Have in mind that on the housing market everything is allowed – today you may be the top bidder, tomorrow you may be out of the game out of sheer luck (or lack of it). Just brace yourself and stay calm throughout the whole process, stick to your budget plan and play it smart. That’s the way to success!