Bidding wars are stressful and can be discouraging when looking for your dream home. Right now, houses are selling fast and bidding wars are becoming a regular part of the process. When there is a bidding war on a property, you don’t want to let emotions get into it and end up overpaying.
If you do find yourself in a multiple big situation, I have 4 pieces of advice for you.
Know The Market!
The first thing to do is become educated about your local market. Knowing the true value of the home you want to buy, will allow you to negotiate better and be more comfortable with your offer. When you have a good idea of the values in your area, it makes it easier to make a fast decision and present a smart offer. Coming to the table with a strong contract will make buyers take your offer seriously.
This is why having a great real estate agent is so important. They can help you break down the market and show you the current fair market price for the neighborhood you are interested in, as well as other areas that may also suit your needs.
Know Your Budget
Before you start shopping for home, you need to know your total desired monthly payment. You can learn this by consulting with your lender.
Learn how much every $10,000 on a loan amount will affect your monthly payments. This will allow you to present what you can truly offer in a bidding war situation. You don’t want to lose out on your dream house over $10,000 when you learn that the difference in your housing payment was only $40 extra per month, right?
If you find yourself in a bidding war, this information will allow you to give your highest and best offer without hesitation.
Is it worth paying more for this home?
Sometimes you find a very special home that is a one of a kind to your area. If you think you are in one of these situations, you need to ask yourself if it is worth paying a little more. Focus on how long you plan to live on this property and begin working your numbers from there. Overpaying for a property isn’t always a bad thing when the market is on an upswing.
A home is not just a place to live, it is also an investment.
When buying a house you want to calculate all the numbers, such as your annual interest and property tax deductions. These also play an important role in your overall investment and many times are overlooked. So make sure you fully aware of all the costs involved.
Try not to become overly invested, emotionally
This is where a great agent is worth their weight in gold. Buying a home is an emotional process. You see all of the potential ahead of you and it’s normal to feel excited.
Negotiating is stressful. A lot of people who aren’t used to negotiating tend to get emotional when they do. Emotion could cause you to overbid and try to win the house no matter what. You need to keep your budget in mind and have a walk away number. I know it is hard to lose, especially when you put a great bid together, but you don’t want to be drowning in debt because of an avoidable bad decision.
A good agent will tell you when to walk away and when to go up in price. Having an agent you can trust will always make buying a house that much easier.
These are just a few tips to keep in mind if you ever find yourself in a bidding war. If you have any questions about this or anything real estate related please contact me. I would be happy to help.