How to Navigate a Bidding War

Recently, the housing market has become increasingly more crowded as an abundance of families seeks out new properties. This oversaturation of the marketplace has led to unique challenges for buyers and sellers alike, as properties now receive multiple competitive offers that ultimately result in a bidding war between potential buyers for a certain home. 

 

For both buyers and sellers, it can be tricky to navigate this situation. Let’s explore some tips for both parties to keep in mind throughout a bidding war.

 

First and foremost, buyers must keep in mind the seller’s end goal - to confidently close on their property for the highest amount possible. To make sure your offer is the strongest, utilize the following best practice strategies:

 

This is one of the most important steps a potential buyer can take to show a seller they’re qualified to purchase real estate. When buyers show that a lender backs them, they convey a level of legitimacy that potential buyers without pre-approval lack. As a result, the bid supported by a pre-approval letter (as long as the offer is already competitive) is more attractive to the seller.

 

If you have the resources, a cash-only offer is hard for sellers to pass up. Buying in cash entirely removes the additional step of getting lenders involved and eliminates the possibility of a mortgage falling through just before closing. Ultimately, an all-cash offer shows that a buyer is serious about a property and has the means on hand to purchase it right away, and this is often near impossible for sellers to overlook.

 

Sometimes, certain contingencies can be removed in this process to make a buyer’s offer more attractive. Say, for instance, the seller is looking to push back their move-out date. If one buyer refuses to compromise and another is more understanding and patient, the sellers will likely be more inclined to choose the latter’s bid because it fits their specific needs and wants. By understanding the seller’s situation and offering to waive certain contingencies in favor of what they need, buyers can set themselves apart from others and up for success.

 

It can be just as difficult for sellers to navigate a bidding war. Sellers have an essential decision to make when faced with an excess amount of strong bids, most of which exceed the seller’s expectations and are hard to turn down. To pick the best possible offer for your property, consider the following tips:

 

Ask yourself a few questions to determine what’s most important to you. Do you want to delay or speed up your move out? Do you want the highest cash offer? Do you want a buyer that will cherish your home and its history? Find out what you want most from a buyer, and analyze all bids through that lens.

 

Bidding wars can get confusing, fast. Luckily, your agent should break down the most complicated parts of the process and explain the most important aspects of the deal to you. If your bidding war is fast-moving, keep your agent on speed dial and discuss each offer as it comes in to make sure that all decisions are timely.

 

If a special offer comes in that you absolutely can’t refuse, avoid the bidding war altogether. When sellers encounter an offer that is significantly better than others, and they are confident can’t be surpassed, it’s best to accept the offer as it comes in. Inciting a bidding war could potentially scare off this bidder and leave you to deal with less than spectacular bids. 

 

Both parties in a bidding war have much to consider when conflicting offers start being presented. Ultimately, it’s all about finding the right buyer who’s willing to provide exactly what the seller needs at the right time. 

 

Whether you’re buying or selling a home, Theo Jordan and Katie Cassman have extensive experience that lends itself well to navigating the ups and downs of bidding wars. To learn more about how these experienced agents can help you navigate this delicate process, email [email protected] or call 847-624-6236.