It’s a seller’s market, which means supply of homes is low and demand is high. If you’re interested in a sought-after home in a great neighborhood, you could find yourself in a bidding war with multiple offers pushing prices higher. Your local mortgage banker can help you win the bid for the home you want.
The first step is to make sure you’re financially prepared for your home purchase. Know the property values in the neighborhoods that interest you and talk with your local mortgage banker to get an accurate estimate of how much home you can afford.
Secure solid financing. “Make sure your lender is ready to issue a pre-approval letter specific to the property,” says A. Wade Douroux. “This is essential in a competitive seller’s market. Once we receive some required documentation from you, we can have you pre-approved the same day. With this official letter in hand, you’re in a good position to compete – even against buyers with cash to offer.”
Hire an experienced real estate professional. Work with someone who knows the market conditions and can communicate well with the seller’s agent
Eliminate contingencies. Rather than making the offer contingent on the sale of your home, be ready to risk carrying two mortgages for a period of time – first making sure you can safely handle the payments. You can also offer to have an information only home inspection rather than making your offer contingent on the outcome of the home inspection.
Be flexible with the closing date. Make the closing date convenient for the sellers. That way, even if someone offers a higher bid, if you’re willing to accommodate the seller’s schedule and give them more time to move out, it may make you the front runner in a multiple bid situation.
Personalize your offer. When there are multiple offers, the tipping point is sometimes emotional rather than financial. Write a letter detailing your love for the home; it may win the sellers over.
Include an escalation clause. This is an addition to your contract that says you’re willing to increase your offer up to a certain limit if other offers come in that match or top your initial bid. “Make sure you set a limit within your budget and be willing to walk away if bidding goes beyond that,” says A. Wade Douroux. “You can also allow your bid to be held as a backup offer if the higher bidder doesn’t deliver earnest money or something falls through. Talk with us about strategies that put you in a solid position to win a bidding war.”
Don’t count yourself out if the seller chooses another bid. Have your agent stay in touch. High offers can fall apart on the appraisal or the buyer might be bidding on multiple properties. Your offer could become attractive again.
Resource Financial Services is here to make people’s dreams of home ownership a reality. That’s why our experienced mortgage specialists work hard to educate homebuyers about the wide variety of loan programs that can be tailored to meet individual financial needs. We offer quicker closings, same-day pre-approval and guaranteed lower rates.
We’re excited to help you find your home, find your loan and get cash back. Start searching for the home of your dreams online at rfsmortgage.com. Call us today toll-free at 877.797.4545 to speak with a local mortgage banker.