Here’s How to Win a Bidding War
By Charissa Jones
You’ve found no less than the house of your dreams. An idyllic, three-bedroom, two-bath oasis wrapped by a perfectly picketed fence. Big, bay windows overlook a tree-lined street or the beautiful green leaves of a summer forest. In the backyard, a grassy expanse playfully unfolds, ideal stomping grounds for your kids and the dog.
But as it turns out, five other buyers searching in Augusta saw that same fence-window-yard combination in their homeownership dreams, and they’ve submitted an offer just like you.
Enter: the dreaded bidding war, a real estate nightmare—unless, of course, you know how to battle through and win. If you’re stuck in this not-fun dilemma, here’s what you can do:
Work with a real estate agent.
Going into a bidding war without an agent is like going into a cookie-baking competition without a cup of sugar. An agent is the secret ingredient, bringing skills, experience and knowledge to your side of the fight. If you choose the right agent, they’ve been involved with many other bidding wars and know exactly what it takes to emerge victorious. When I work with clients, for instance, I’m able to keep them from making risky financial moves and can assess if the house is truly worth what they’re willing to offer. I also provide advice when my clients need it and might even be able to get some intel from the listing agent that can give them an edge over the competition.
Have your pre-approval letter handy.
Step one, of course, is getting pre-approved for a mortgage but step two is having your preapproval letter ready and waiting when you make an offer. A pre-approval letter means serious business—it’s based on your income, W-2 forms, bank statements and credit score. To a seller, this letter puts you ahead of the pack (or at least, ahead of those without one).
Make an all-cash offer.
Why do deals fall through? A lot of times, it comes down to financing. With an all-cash offer you avoid all that and there’s no need to obtain a mortgage. (Seller translation: Less complicated. Love it.) It's not uncommon for sellers to choose all-cash offers over higher offers they’ve received. If you can pay in cash, do it and the house will most likely be yours.
Waive all contingencies.
Let’s get into the real estate weeds here a little: A clean offer is an offer in which a buyer has agreed to waive all contingencies, making the offer safer for the seller and riskier for the buyer. A contingency is a stipulation included in an offer that specifies that the deal will only close if specific conditions are met, such as asking for a home warranty or seller's contributions. For example, an earnest money deposit is made to demonstrate a buyer’s seriousness, but if the buyer backs out due to a contingency stated in the contract, the buyer can keep their money. If a buyer backs out with no contingencies, the seller keeps the money. Removing all contingencies guarantees the seller is not at risk when choosing to sell to you, and therefore is more likely to go with your offer.
Write a personal letter.
A home is so much more than four walls and a roof. It’s memories made and cherished. It’s singalongs in the living room and summer cookouts on the patio. With all that meaning placed on home, you’d only expect that selling one is a very big deal. A home sale can be a heavy emotional burden, which can sometimes be alleviated when a seller knows their property is going into fantastic hands. Crafting a heartfelt, handwritten note to a seller explaining your story. Include who you are, what you love about the property and why you know you their house should be your new home.
In the end, bidding wars are tough but they’re not unwinnable. With a savvy agent by your side, you can conquer anything.
For more questions about bidding wars, feel free to reach out: email: email@example.com phone: (706) 631-2422