February 18th, 2014
With the U.S. experiencing increased for housing, many homebuyers are finding themselves locked in bidding wars for the properties they want.
The intense competition has had some buyers looking for ways to get ahead of other consumers who are bidding on their desired property. Although there are many tools that can be used in a bidding war, some work better than others. A recent report from real estate agency Redfin ranked the strategies that were most effective for wrestling a home away from the competition in 2013:
Although all-cash offers held the top spot, most homebuyers need financing to buy a home, meaning this strategy may not be viable for a wide range of consumers.
If buyers get a pre-inspection and still make an offer, sellers may have more confidence that they have a serious prospect. This move tells a seller that a buyer still wants to buy a home even after seeing its flaws. Contingencies protect buyers in case the final inspection or lender’s financing comes short of their expectations. However, contingencies can make a seller feel like a buyer is not intent on closing the deal.
Cover letters give a buyer a chance to form a personal relationship with a seller, a factor that could prove advantageous.
While not all of these strategies may work for your personal situation, consulting with your real estate agent and your mortgage consultant may be beneficial in a bidding war scenario.