MINT HILL, NC – With a highly competitive real estate market in most areas including the Mint Hill real estate market, it’s necessary to understand how to win a bidding war. You will likely be going up against multiple buyers whenever you put in an offer on a home. Let’s look at some of the top tips to help you win a bidding war with the competitive market of today.
Start with Preapproval
When you’re preapproved for financing, you have a better chance of winning a bidding war. Sellers won’t even consider an offer that doesn’t include a preapproval letter unless it’s an all-cash offer. Then you need to provide a POF – Proof Of Funds letter. Remember, you’re going up against multiple buyers, so you have to stand out.
Be sure to actually get preapproved and not just prequalified. They are not the same thing and a preapproval carries weight, while prequalification won’t do much for you. Savvy listing agents know the difference and will educate their sellers.
While there are some contingencies you should never give up, outside of a few, avoid putting contingencies into your offer. Your lender will have an appraisal contingency and you should always include a home inspection contingency, but any less common contingencies can make your offer not as attractive to sellers. Some buyers are choosing the forgo the appraisal and/or inspection contingency. That option requires some serious discussion with your agent as it comes with a lot of risk that not all buyers can afford to take.
Consider a significant Due Diligence Fee & a short Due Diligence Period
The Due Diligence Fee is a non-refundable deposit that goes to the seller. It is supposed to compensate the seller for ‘time off market’ in case the buyer terminates the contract during the due diligence period. A few months ago a $2000 due diligence fee for a 3-4 week due diligence period seemed reasonable. Now, much higher amounts and shorter due diligence periods are often times being offered.
Offer All-Cash, if Possible
If you have the ability to offer all-cash or bring a large sum of cash to the closing table, this can help you compete in a bidding war. You can even pay cash over the appraised value, if necessary, to win a bidding war and still get approved for the financing you need.
Consider an Escalation Clause
With an escalation clause, you can raise your offer as competing bids come in. This type of clause will allow you to set a cut-off price and how much you want to raise your offer over a new offer. It’s a bit like placing a bid that starts at your initial offer and goes up incrementally as other people outbid your price. This, too, needs to be discussed in great detail before offering it.
Hire an Experienced Real Estate Agent (!)
A good agent will be able to put you ahead of the curve when it comes to submitting your offer. When you’re searching for homes for sale in Mint Hill, NC, or the surround area, the right real estate agent will know how to win the bidding war.
A good local agent knows what to expect because they deal with it every single day. They know how hot the market is and what sellers are looking for in an offer.
With these tips and a good real estate agent, you’ll be able to win a bidding war a bit easier. There are many ways to make your offer stand out and your agent can advise you with even more tips to help you submit the best possible offer. In the end what’s most important is that you make the offer that takes your budget, needs and risk tolerance into consideration.
I would love to be part of your journey when the time is right for you. If you ever have a real estate question or need, or know someone who does, trust that you can turn to me. I will help you make the right move! Anna Granger (704) 650-5707 | firstname.lastname@example.org | www.1stchoicepropertiesinc.com