Following a housing disaster that shook buyers and sellers alike, there are tentative signs that the market is looking up. And now, with mortgage rates low and the economy on the upswing, homebuyers are more likely to have to engage in a bidding war before they can sign on the dotted line.
According to Redfin, an online real-estate brokerage company, more than 69% of homes that were up for sale in June had multiple offers. Until recently, bidding wars have typically been more common for lower-end properties, but they’re now becoming increasingly popular for higher-priced housing as well.
“There’s a lot of pent-up demand right now. People want to get their own place fast,” Glenn Kelman, chief executive of Redfin, told the Wall Street Journal in a story that outlined advice for winning a bidding war and still getting a great deal. Here, a roundup of the article’s top home-buying strategies:
Know Your Neighborhood
Check the asking price with your real estate agent or compare it to the list price on websites such as Realtor.com, Trulia, Zillow or Redfin. There’s no better way to offend a seller than to begin negotiations with a first offer that’s far too low. Lowballing might have been a smart pre-recession ploy, but nowadays buyers need to be more straightforward when making a first move. In fact, according to one expert who’s quoted in the article, the best tactic might be to make a maximum bid right off the bat.
Keep Your Cool
Bidding wars can get emotional quickly, especially if you’ve fallen in love with a property, so it’s important to remember your financial limitations. Pick a “walkaway number” that’s the highest price you’re willing to pay and always have the number in the back in your mind so that you know when to move on.
Don’t Be Afraid to Compromise
Being flexible on the terms of agreement can give you a leg up. From letting the seller determine the move-out date to waiving your right to an inspection, there are small courtesies that you can extend to the seller that will go a long way to getting you a lower price.
Run, Don’t Walk
Do as much prep work ahead of time—like making sure you’re prequalified for a mortgage before you put in a bid—so that, once you find a place you love, you’ll be able to act fast. Coming in with a bank-approved offer quickly can help you beat other bidders to the punch.
Try, Try Again
If you do lose a bidding battle, remember that all may not be lost. Not every housing deal has a happy ending, so let the buyer know that if the winning offer falls through, you’d still be interested in the property. It might turn out that you’ll get your dream house—at your dream price—after all.
This story was originally published by LearnVest
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