3 Ways to Win at a Bidding War
As a seller, bidding wars on your home are welcome, but if you’re a buyer trying to obtain your dream home, bidding wars add an extra layer of complexity to an already complicated process. Having the right agent to help you through makes all the difference. Here are some tips to make your offer stand out and be more appealing in a bidding war.
1. Escalation Clauses
An escalation clause is a contract addendum we can add to your offer that will automatically increase your bid by a certain amount up to the maximum you’re willing to pay. For example, if you’re willing to pay up to $220,000 for a home, you can place a $200,000 bid and, if someone else outbids you, an escalation clause would automatically increase your bid by your predetermined amount, at which point you would automatically be taken out of the running. This ensures that you are always the top bid (unless another bid exceeds your predetermined maximum).
In a bidding war, the person offering the most money isn’t always the person who wins the home. Writing a personal letter to the seller explaining how much you love their home and what their home would mean to you and your family can give you a huge leg up on the competition. We can even include a picture of you and your family so the seller can see the face behind the bid.
Most home sales involve a certain number of contingencies that a seller has to agree to for a buyer to purchase their home. There are some indispensable ones likes passing a home inspection, but in a bidding war, minimizing other contingencies can grab the seller’s attention.
Below is a video I made during the peak of the 2016/2017 red hot market, which will provide some additional insights.