Realestock Blog

So you’ve discovered your perfect dream home and you’re wondering how much time you have to think about it before making your offer. Problem is, there are three other people interested in the exact same property and you’re not sure what to do. What do you need to know in order to stand the best chance at signing on the dotted “sold” line? Keep reading for the real deal on how to prepare before entering the multiple-bid realty trenches.

Loan Logic

Get pre-approved financing so you know the maximum amount of funds available to you. By doing that, you’ll be aware of the maximum amount you can bid and it allows you to shop around accordingly. An agreement to put down the largest down payment or deposit you can afford, along with a thumbs-up from the bank also helps to establish to seller’s that you’re serious about buying the property.

Keeping Up With the Market

Learn what the fair market value is considered to be for property you’re interested in; as well as for the similar homes in the neighborhood. When you find out what comparable homes are going for, you’ll know if you’re shopping beyond your means or within them.

Play Clean

Avoid adding unusual terms and conditions to your bid, like buying someone’s home on the off-chance that you’ll sell yours first.Additional clauses that depend on other circumstances will give vendors headaches and they may have another offer at your price, but without all the loopholes. By making a ‘clean’ offer, you stand a better chance at getting what you want.

Inspect the Home

Set aside money for pre-buy home inspections. If it turns out that the house you want to buy has a roof that’s about to fall in, better to find that out before you bid — especially since it might make you look twice at a similar property around the corner that is going for the same asking price, but with a recently renovated roof.

Don't Get Bogged Down by Decor

Fancy art may make a formerly drab house look fab, but none of these things will be there when you buy the house. Also, the color of the paint in the bedroom might look impressive, but might not suit your furniture…at all. Make sure you’re not being taken in by the smoke and mirrors of objects that are not part of the home’s architectural charm.

Uneven Steven
Don’t bid $250,000 on a house when you’re in a bidding war and your budget could easily permit you to extend $251,200. Bidding an odd number might seem strange, but your bid will stand out from the rest and may just beat an offer that came in at a slightly lower figure with a more common-sounding bid.

Revisit Kansas
Go back to see the house that felt so magical to you on the first visit more than once. One reason is that what strikes you as a great first impression may make a less favorable second or third impression. Another reason is that more than a few sentimental homeowners have sold their house to a young family that somehow reminds them of themselves. If you are able to meet the homeowner and they establish a connection with you, they may look upon your offer more favorably than that of another bidder — even if your competitor’s bid is higher.

Pull the Trigger
Figure out the vendor’s “trigger” — what would make them sell. If you know that the homeowner has a certain closing date in mind which is slightly different from yours, offer to meet their terms —sometimes that’s all it takes to be selected over another bidder, even if the competing offer is higher. And if you know the sellers are not looking forward to moving basement-assembled pool table because it’s expensive to move, ask about buying it to see if that will sweeten the deal.

Hide Your Hand
What helps is knowing the true value of the house. Let’s say you’re pre-approved for a $400,000 loan and the house you’re interested in bidding on would be fairly priced at $350,000 according to your Realtor's estimation, compared to other similar houses in the same neighborhood. You may be smart to bid higher than their asking price and more than fair market value but still less than $400,000.

Know Right from Wrong
There’s an age-old maxim: “buy the most expensive house you can afford.” This is a savvy real estate suggestion, because if you can afford a $325,000 three-bedroom home but instead settle for a $275,000 one-bedroom home thinking you’ve saved some money, you could regret it sooner than you think. In bidding wars, there’s a grave danger of overpaying if you get swept up in the auction-like fray — know when to fold ’em, walk away and run.

So before you engage in battle, arm yourself with credit pre-approval, a little research, an arsenal of financial strategies, heightened market value awareness and a great Realtor. Then cross your fingers and go forth to find your own home sweet home.