Here are 8 tips for standing out in a bidding war:
A new trend we’ve seen is to include a personal letter to the seller’s introducing yourself and appealing to the buyers as people. Make your letter stand out by referencing a specific personal item in the home, if possible. You can also include a photo of yourself or your family to really show off who you are. Know who your seller is. If you’re putting in an offer on a foreclosure home, for instance, a personal letter won’t be of much help. However, individual sellers and even estates can often be swayed by this personal touch.
Sellers may have a specific needs in regards to closing. If your agent is able to find out their specific timeline, do your best to follow it. If you are unsure of the timeline, include a clause stating that you are flexible with closing based on the seller's needs.
3. Include an Escalation Clause
An escalation clause states you will pay a specific amount over any of the additional offers up to the maximum you are willing to pay. This helps to avoid a stream of counter proposals and move to a deal quickly. Talk with your agent about how to add this clause in.
4. Buy with Cash
If you have the ability to buy a home with cash, you will have a huge leg up in a bidding war. Cash offers allow more flexibility for closing dates and are able to move more quickly, making them more appealing to sellers.
5. Don’t Include Contingencies
It’s not generally recommended to waive an inspection contingency as you want to ensure you are making a good investment, but there are a few other contingencies you can waive to make your offer stand out. For instance, an offer without a contingency to sell a current home will be more appealing. Talk with your agent for ideas of other items you feel comfortable waiving.
6. Pad the Earnest Money
Earnest money is in place to prove you are an able buyer. If you are looking to really stand out, offer to pay more than the sellers are requesting in earnest money. This shows you are a strong buyer and able to secure financing.
7. Include an Inspection Waiver
Getting an inspection on your new home is highly recommended. However, there is some wiggle room you can write into a contract. Consider including a clause stating you will not ask for inspection items to be addressed if they are under a certain dollar amount and pose no immediate health or safety risk. This type of clause can give sellers a sense of security and help sway them toward you offer.
8. Keep in Touch
Even if you don’t win the deal initially, ask your agent to keep in touch with the selling agent, or at least keep an eye on the status of the deal. If the property comes back on the market the sellers may be more inclined to sign with a buyer who previously submitted an offer.
As with all real estate negotiations, consult your real estate agent before making decisions. Now, go team go!