Finding the perfect home for the best purchase price can often feel like a daunting endeavor, particularly when there are competing bids for a property from other buyers. But, with the right insight and strategy, you won’t have to worry about missing out on an ideal property — no matter how competitive the bidding process may be.
In this blog post, we’ll explore what it takes to beat out pending real estate offers while arming yourself with the information needed to win your dream home without getting into a bidding war. So whether you’re looking for tips as an interested home buyer or helpful advice as a real estate agent looking to score that winning bid on behalf of your clients — read on!
Be the Best Offer
The first step in beating a contingent offer on the house is understanding what can make your offer stand out. This means looking closely at the conditions of the original offer and determining what sets your bid apart. In particular, pay attention to factors such as price, financing terms, closing timeline, and any financing contingency that may exist with the original offer.
During the past few years in the hot and competitive market, we saw many buyers doing all sorts of crazy things like waiving inspection, adding in an appraisal gap guarantee, buying sight-unseen, offering tens of thousands of dollars over the asking price and/or appraised value, buying as-is, etc., to secure their slice of the property pie.
While we don’t necessarily recommend doing any of those things, you should flow with what the market demands to the extent you’re comfortable with. If you want that house, make that clear to your agent and talk strategy about things they recommend you do to stand out from the crowd.
If nothing else, hire a real estate agent, get pre-approved for a home mortgage loan, be ready to submit your offer quickly, prepare to submit your earnest money deposit, secure your down payment funds, and be ready to offer a flexible closing date so you can strike while the iron is hot. One thing people will do if they want to be a cash buyer but they’re just not quite there is they offer a higher earnest money deposit to show they really are up to snuff and are willing to back their interest with cold hard cash. Before acting on it, you should always ask your real estate agent and lender if this is a good strategy. If you need local real estate advice, look to the qualified agents at TheMLSonline for all things Minnesota real estate!
What Leverage Do You Have?
Another way to ensure you win a bidding war is by leveraging any special circumstances or advantages you have when making your own purchase price bid. For instance, if you can provide proof of funds and make a cash offer on the property, this could immediately give your bid an edge over others who cannot be cash buyers. A cash buyer is often way more appealing to sellers than someone with unfavorable or restrictive mortgage loans and down payment terms.
Additionally, making a ‘no-contingency’ offer could put your bid far ahead of any other competitive offers, even if those other offers are from cash buyers. Another thing you can do is reassure the seller there will be no other contingency, like the sale of another home, that will lead to you needing a far-out closing date.
Be Real With the Sellers
Finally, the last way to beat a pending offer is to appeal to the seller emotionally — essentially helping them understand that you’re the right person for their home. This means writing heartfelt letters about why you feel like your perfect match for their property or going above and beyond in providing additional documents such as proof of employment or references from previous landlords. Of course, this may not guarantee success every time; but it certainly can’t hurt! In a seller’s market, it’s important to do what you can to stand out, so ask your real estate agent to submit your personal letter (preferably handwritten) with your conventional or cash offer.
Stay in the Fight!
At the end of the day, beating out a contingent offer on the house requires research and understanding, and leveraging certain special circumstances and advantages you may have. Taking the time to evaluate your options and consider all aspects of a particular offer can give you the edge needed to secure your dream home in a seller’s market — no matter how competitive the bidding process may be. Good luck!
For the latest in local real estate market news, visit TheMLSonline’s website today!