Bidding Wars And Buying A Home

Bidding Wars And Buying A Home


Sound familiar? Believe it or not, bidding wars are fairly common in even today's Hoboken real estate market, and rings true across the suburbs of New Jersey real estate.

Speaking from personal experience, bidding wars are not fun and can be extremely stressful.

Photo:  Daylife

Losing a home can be crushing, especially if you were lucky enough to find one that has everything you are looking for.

Some buyers can never shake the memory of the house that they lost, and compare everything else they see to it, leaving them forever unsatisfied and unable to make another offer. Others accept that perhaps it wasn't meant to be, and move on using the occurrence as a learning experience.

Some things you can do to avoid becoming involved in a bidding war:

• Be available on short notice so you can see a home quickly when your agent calls you
• Make sure you have no contingencies, such as selling a home, or you aren't pre-approved for a mortgage yet
• See a home early in the week before the weekend rush when possible
• Bid aggressively; sure everyone loves a good deal, but if the price is right, don't waste precious time negotiating money that in the large scheme of things are mere pennies a day and could buy time for another buyer to fall in love with your home

But if you find yourself caught in a bidding war, here are some things you can do to increase your chances:

• Ask the agent if the seller will be fair and give all parties a chance to come back to the table
• Ask how many offers there are
• Ask if any of the offers are the listing agent's buyers, or in their own office
• Be armed with your attorney on hold, ready to start review, and your mortgage broker available if the agent or seller want to verify your pre approval
• If you were outbid, and this hasn't been done, ask the agent for a chance at highest and best
• Try not to worry about what the other buyers are bidding, or if you over paid by out bidding the other buyer. Rely on the market research your agent has shared with you, otherwise you'll drive yourself crazy
• Discuss possible strategies that will give you an edge, for example, waiving of mortgage or home inspection contingencies
• Offer a flexible closing
• Ask if seller or seller's agent has a preferred mortgage company that you should be pre-approved with before submitting your offer
• Write a letter to the seller, tell them how much you love their home (but keep it short and sweet)

If you win the bid, congratulations and move forward! Don't think that all seller's will honor your offer. Don't waste time, and make sure your attorney gets you in and out of attorney review as soon as is possible for everyone. 

This will minimize the chance of buyer's remorse from one of the other buyer's that lost the house from coming back and coming over the top of your last bid, never to hear from the seller again.