In many major metro areas, the demand for homes is sky high, but the inventory is low. When there is a lack of homes for sale in a hot real estate market, shopping for a home can be quite frustrating since multiple people are often interested in the same home, and houses rarely stay on the market for long before going under contract. If you are in this type of situation, you may feel like giving up, but there are things that you can do when you're faced with a bidding war on a home that you are very interested in buying. Use the following tips to help you succeed in a bidding war on a home:
Include an Escalation Clause with Your Offer
When bidding wars on homes for sale are common in a market, making an offer on a home can be challenging. People want their offer to be high enough to be accepted, but no one wants to pay more for a house than they have to. In this type of situation, including an escalation clause with your offer can be very useful. With an escalation clause, you make your best offer, but also say that you will beat other offers up to a certain amount. As an example, you can offer $300,000 for a house with the promise that you will beat any other offer by $2,000, up to a set price, such as $310,000.
Don't Make the Mistake of Asking for Contingencies
If there are bidding wars in the area where you're looking for a house, the ball is in the seller's court. This means that you need to make your offer as attractive as possible in order to beat out other offers. This can be done by not asking for any contingencies when you submit your offer. Common contingencies include closing cost assistance or cash back to make repairs on the home. You will need to be prepared to make your best offer, which may mean not asking for anything from the sellers.
Make Sure Your Financing is in Order
One of the best ways to win a bidding war on a home for sale is by making an all-cash offer. If you happen to have the funds available after selling your own home, offer to pay in cash. However, not a lot of people can afford to pay for a home in cash. If you will be taking out a mortgage loan, make sure that your financing is all in order so you can show a seller that you will be able to close on the transaction without any delays or issues.
For more information, contact a real estate agency and ask about homes for sale in your area.