How to Successfully Navigate a Home Bidding War

Posted by Justin Havre on Monday, January 7th, 2019 at 9:12am.

How to Survive a Bidding WarBuying a home in a high-demand neighbourhood requires a calculated approach. Buyers who are organized and ready to meet sellers' needs are more likely to win a bidding war. It is also vital to keep calm and realize that home buying is short, but homeownership is long-term. People should not get swept up in the game, just because they want to win. Competition is sometimes unavoidable, but extra preparation and a quick decision could make all the difference.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Organize Financing

Although almost anyone can make a purchase offer, the guarantee of funding can set buyers apart from their competitors. People who have gone through the mortgage pre-approval process have a much better idea of what they can afford. In addition, they have already completed some of the work required by a lender, so approval may take less time. Buyers should also consult with their real estate agent to find out the local standards for a deposit to prove their interest. Having a cheque ready could show sellers that the buyers are ready to move quickly.

Set Reasonable Limits

It can be tempting to let a bidding war take control of the pricing process. However, people must ensure that they do not end up making an offer they cannot afford. Sometimes, Rutland North home buyers get pre-approved for an amount that would be too much for them to manage. Buyers should take an honest look at their finances and see what kind of monthly payment they can reasonably handle. This will help them determine what is the best limit to set for buying a home.

Prepare to Buy

People can save themselves a lot of time if they go into the shopping aspects with specific goals in mind. In a high-demand area, preparation helps buyers avoid wasting time looking at properties that do not work for their needs. It also ensures that people are ready to select a home more quickly. In some neighbourhoods, buyers may not even have a full day in which to make a decision. Knowing what they want and being able to choose shortly after a showing will help people take advantage of the little time they have.

Minimize Conditions

As a general rule, buyers may need to put a few conditions into the purchase offer. The two most common, and usually the most important, are clauses about a home inspection and a home appraisal. These conditions allow buyers to back out of the sale if the inspection reveals serious repair concerns, or if the home appraises for less value than the purchase offer. People should try to minimize any other conditions, but they must take care. Bidding wars can sometimes result in a highly inflated offer that a lender will not honour. Forgoing the appraisal condition could leave buyers in a difficult position. Make sure you discuss all decisions about purchase conditions and clauses with your agent first.

Stay Focused on Reality

Ultimately, bidding wars will leave many people with no choice but to move on to the next house. Buyers should keep in mind that there are many homes that could meet their needs, and try to avoid getting too invested into one particular property. A cool head can make it easier for people to evaluate a number of homes at once, without making financial decisions they will later regret. Your real estate agent can help with showing different options of home styles, prices and neighborhoods.

Joining a bidding war to buy a home can feel exhilarating and terrifying all at once. By getting all their information in order and keeping control over their own decisions, buyers can get a home they want without diving in too deep.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Justin Havre

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