The kitchen of my “pending” listing in Olathe, which received multiple offers on the first day.
The spring real estate market has arrived, and with it, we are seeing intense competition among home buyers in many parts of town. It is common to see homes receiving contracts on the first day, multiple offers, and homes selling for more than list price. If you are a seller, this is a great feeling! However, buyers looking for a cute Cape Cod in Prairie Village or a big Ranch in Old Leawood may be feeling a little bit stressed out by the heavy competition and rising prices.
Ten tips for Success When Entering a Real Estate Bidding War
- Know the Neighborhood – Know where you want to live, values, and floorplans so that you are ready to pull the trigger when a good home hits the market. There is no time for hesitation.
- Don’t Lowball – I know everyone wants a deal, but the only way to get a great house in a hot market is by making a tidy, realistic, and strong offer.
- Have a Walkaway Price – If you are competing with other buyers, it can be stressful. Be sure you know your financial limits beforehand and don’t get caught up in winning or losing.
- Be Flexible on Terms – Price isn’t always everything. Being flexible on things like closing date, possession date, and closing costs can boost your chances.
- Be Fast – Watch the market like a hawk and try to get there first. Being the first offer can sometimes work in your favor.
- Have an Experienced Agent – In this situation, you will benefit from working with a good, detailed agent. Be sure you are working with someone who can make sure your offer is perfect, that knows what questions to ask and when to ask them, and that is familiar with the market in your area.
- Get Pre-Approved for your Loan – All sellers will want to see proof that you can actually buy their home so be sure to have your official pre-approval letter ready in advance. If you are a cash buyer, have a proof of funds letter from your bank.
- Discuss Appraisal Contingency – If you are offering more than list price on a home, what will you do if it doesn’t appraise for that much? Talk to your agent about this; being informed in the beginning could reduce issues down the road.
- Be the Backup Offer – So many buyers give up once they hear that a home is under contract. If you love a house and the seller is still accepting backup showings and offers, go for it! Your backup offer could affect how the seller responds to and interacts with the first deal. It doesn’t hurt to try.
- Include a Personal Appeal – Often, when I know we are in a competitive situation, I urge buyers to submit a nice letter along with their offer. If you have a cute little family, include a photo too! Remember that not everyone is 100% motivated by money, and sometimes simply knowing that the home will be in good hands can be effective.