Bidding Wars Not Just Bucks
Some areas of the country are so overrun with people wanting to buy a home
that sellers are having an opportunity to pick and choose who wins the battle
of the bid. It is no longer a world where the asking price is enough. Buyers
have to get a little more creative than that. It's the money, and a lot more.
Even rising interest rates haven't slowed this trend in metropolitan areas.
It's a fact of real estate today that many agents are starting to take
So what do you do when you want a house and there are three other contracts?
You get personal.
If you are offering a competitive bid (i.e. one that meets or exceeds the
asking price or offers another financial incentive such as points), you have
some room to play. There are some add-ons that could entice the owner to your
way of thinking. Of course, none of these ploys will work if you don't have
the money to pay. Sellers want the money first and foremost, but if you are
bidding against others and the asking price is being met, you may have a
shot. Here are some tricks to keep up your sleeve:
The No-Fuss Sell
If the fight is tough, you may want to offer the sellers a no-fuss deal.
Limit your contingencies, offer more than the asking price (if possible), and
be pre-approved so financing is not an issue. You may even want to pick up
the closing points and fees. The more you can take off the seller's
shoulders, the more attractive your bid will be. But what if you can't afford
all that? Are you out of the fight? Not necessarily.
This is the time to add frills to your deal. Get personal. Find out as much
as you can about the sellers. Your agent might know. You may have gotten a
clue going through their house. Maybe you know they are retiring and planning
to travel a lot. If so, why not offer a couple of weeks in your time share
for free? If the couple likes to cook, why not offer a gift certificate to
Williams-Sonoma or some other gourmet store? Whatever you can do to add a few
perks will help. It doesn't have to cost you a lot to make a difference in
the bid. Even sending flowers can make a big difference.
The Human Touch
Perhaps you are in a bidding war against a developer who wants to tear down
the house and replace it with a parking lot or even an apartment building.
This is an opportunity to appeal to the human side of the sellers. Write a
letter stating that you intend to preserve the home and raise your children
in it. If the sellers have lived there a long time, it may be enough to give
your bid the winning touch. Adding a picture of your family couldn't hurt.
The more you can make your bid personal, the harder it will be for the seller
to ignore it. Make it personal.
Find something you and the sellers can agree on. It may be the school
district or the great hiking nearby. Look for common links that will appeal
to the seller's emotions. If there is something that is dear to the seller's
heart near the home, she is more likely to lean your direction so you can
enjoy it too. If the home has a great garden that has been tended
meticulously, you may be able to win the bid by showing how skilled you are
at gardening and telling the owner how well you will care for the gardens.
To win the bidding war, you have to have the financial resources and a few
creative touches up your sleeve. Don't worry about exceeding the offer, you
may be able to win with your frills. It's worth a try anyway.
Source: Written from information from the writer Sean O'Neill and
Kiplinger's Personal Finance Magazine.