You're probably aware that in most areas of the country, the housing market it hot, hot, hot! That can be great news if you're selling, but can be really difficult if you're in the market to buy. In fact, many areas, like Austin, Texas, are seeing multiple offers and bidding wars all over the Austin-area. So if you are in the market to buy, what do you do if you find yourself in a multiple offer situation? Our friends at AustinLocal.com have 10 great ideas on ways to win a bidding war, and secure your new home!
Get Pre-Approved with a Reputable Lender: Having a pre-approval letter is essential when competing against other offers.
Waive the Loan Approval Contingency: Sellers like offers that give the buyers less chances of backing out. If you are fully pre-approved, you can safely wave the loan approval contingency, making your offer more attractive.
Waive the Appraisal Contingency: In a market like today's, appreciation is increasing so quickly, home appraisals don't always meet the contract price. By waiving the appraisal contingency, you can make up the difference in cash or up to an amount you are comfortable covering out of pocket if the home appraises for less than the contract price.
Waive the Inspection Contingency: Waiving the inspection contingency does not mean you won't get an appraisal. Instead, it tells sellers you won't be coming back to them asking them to make any repairs or lower the sales price to cover any potential repairs that may be uncovered. In addition, you still have the ability to opt-out of the contract during the Option Period should the inspection uncover more than you're comfortable with.
Increase Your Down Payment Amount: Increasing your down payment to 20% or more, even if your lender requires less, shows the seller you are a strong buyer in a solid financial position.
Offer a Lease Back to the Seller: Offering a seller a leaseback gives them more flexibility when moving, especially if they have not yet found their next home, are moving out of state, or prefer to wait to move until after their new home closes.
Don't Scrimp on Option Fee and Earnest Money: By offering an above-average Option Fee/Earnest Money and below average Option Period shows the seller you have even more invested in the transaction than other potential buyers.
Consider Using an Escalation Addendum: There may be cases when buyers are willing to go above the best offer received by the sellers from another potential buyer. In cases like these, Realty Austin agents have an attorney-approved escalation addendum at your disposal when making your offer.
Make a Cash Offer (Or Use a Cash Bridge Program to Make a Cash Offer): We've all heard "Cash is king", but what if you don't have the ability to make an all-cash offer? Thankfully Realty Austin agents have access to programs that enable qualified buyers to make a competitive all-cash offer, using the lender’s money. Other perks include the ability to close fast, and then refinance into a permanent loan at favorable terms.
Work with an Experienced Buyer's Agent: Perhaps now more than ever, working with an experienced agent who knows the market well and can help you navigate a multiple offer situation without overpaying and keeping your best interests in mind is critical.
Note: not all of these tips are appropriate in every situation. Always consult with a licensed REALTOR®.