How to: Win a Bidding War

Sometimes, there can be complications while attempting to buy a house. What if you make an offer on your dream home, but someone else makes a better offer? How do you win the bidding war? Here are some tips from CNN Money on beating out the other bidders:

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1. John Walsh, president of Total Mortgage advises: “What sellers really don’t want to do is waste time”. Even if you do not have the highest bid, sellers are often willing to take a lower offer if it is the easiest, hassle-free way to sell their home.

2. Paying with cash will always get a seller’s attention. If you can afford to buy with cash a seller will often prefer your offer because it means no messy loan applications and mortgage negotiations. It is quick and simple.

3. If paying with cash is not an option, pre-underwriting a mortgage is a great way to speed up the loan process. According to Les Christie of CNN Money, “Sellers look favorably on pre-underwritten offers because they don’t have to worry that the buyer’s mortgage application will be rejected. All that needs to be done after the contract is signed is to complete an appraisal”.

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4. Having initiative and getting your offer in first can help your chances. If you can go see the home as soon as it is on the market and make an offer quickly then the chances of getting into a bidding war are much lower.

5. An escalation clause will keep your offer higher than everyone else’s. This clause states that you will pay a certain amount more than any other offer that comes in. If someone makes an offer of $400,000 then your offer will automatically be bumped to $401,000 thanks to the escalation clause. Choose this option wisely, however. Make sure you have the means to escalate your offer over other potential buyers’.

Just because there are other offers does not mean that you have to miss out on buying the home of your dreams. Don’t let the opportunity slip away simply because there are others interested in the home you want. Knowing how to avoid or win a bidding war could prove invaluable to acquiring your next home.

 

Read the Original Article Here: How to win a bidding war on a home