Recently, you may have found the house of your dreams. Unfortunately, the home you want may be so fabulous that multiple other potential buyers are also preparing to make an offer. Bidding wars will often occur when a property is a hot commodity and if you are not careful, you might lose your dream home — or worse, pay more for a property than you can afford.
Here are a few tips to help you be successful in a real estate bidding war.
Work With an Experienced Real Estate Agent
Whether you are the sole bidder or in a high stakes bidding war, you should never try to purchase a home without the assistance of a seasoned real estate agent. The agent can help you create an offer for the home seller that is fair, protects you, and ensures you are not going too far over your budget. Additionally, your agent can also help determine if the home is worth fighting for, or if you should walk away and look for a new property.
Secure Mortgage Preapproval Before Submitting Your Bid
Never enter a bidding war without first securing your mortgage preapproval. This preapproval will show the buyer that you are serious about this decision. If you are successful, you can purchase the house. The preapproval also helps you know how much house you can afford. However, just because you are preapproved for a large amount does not mean you should spend to your cap to secure your dream home.
Instead, use the preapproval as leverage over other potential buyers. Likewise, use this amount to gauge how much house you can afford.
Remain Flexible on Your Down Payment and Closing Dates
In addition to increasing your bid to remain competitive, there are other strategies you can utilize to remain competitive. For example, consider increasing your down payment. This will let the seller know that you are serious about securing the home. However, do not put more money down than you can afford, even if this means losing the property.
Be flexible with the seller on the closing date, as well. For example, if the seller wants to extend the closing date, consider agreeing with this extension if it means you will secure the property.
Finding your dream home can be tricky, especially if you find yourself entering into a heated bidding war. Luckily, with the help of a seasoned real estate agent, it is possible to be successful in a property bidding war. Contact a real estate agent to learn more.