Purchasing a new home can be stressful enough without the additional steps you must take that begin with prequalification to the moment you close the deal. There is more to deal with than just getting the . Getting to the end of the voyage, making it to closing involve many pieces to an already big puzzle. Just like any puzzle, if you miss a piece, the puzzle is ruined. You would not to miss out on any part of your home purchase process. One of the parts of the puzzle that many people tend to find frustration is with the bidding process. The bidding process is one of those things where the mantra “too little, too late” can have true meaning. Bid too little and you may watch your picket fenced dream fade away. Bid too late and you may find out that someone else will walk away with your dream home.
Planning a Bidding Strategy with Your Realtor
Just as you would go into an auction for a piece of fine china, getting into a bidding war for that home of your dreams is no different. You must have a strategy and your realtor can play an important part. Your realtor from has the knowledge you would need to get the upper hand on competing bidders. There are many homes sold today that went for more than their asking price and statistics are climbing. This just goes to show how competitive the market is, because prices are most likely to escalate when more than one buyer bids on the same home. But she who offers the highest price is not always the winner. It can often be a lot more complicated.
Some people try to avoid the bidding war because there’s rarely any face to face interactions. In addition, although it may feel like it, these traditional home sales are not akin to a live auction.
The right realtor like those at Nationwide Home Loans will help their clients gather and analyze as much information as possible about the home, the seller and the seller’s situation. They will advise buyers in coming up with their strongest offer in terms of price and in terms of earning the seller’s confidence so that the transaction will close smoothly.
Other than offering the highest price, buyers have many strategies they can consider like offering all cash if you’ve got it, to waiving the inspection, financing and appraisal contingencies. Many of these can be used in various combinations, depending on the situation. So, you see, it could come down to more than . It could come down to a bidding push and shove in a competitive market. But when you want to make the entire process a little more simplistic, consider the following helpful tools.
- Get a pre-inspection – Being proactive is smart and you may find it to your advantage to get the inspection before submitting the offer so that you know in advance exactly what you’re buying and be able to waive the inspection contingency without waiving your right to an inspection.
- Offer an earnest money deposit that is far above all others – Most times, an earnest money deposit can be 1 to 3 percent of the offer price, but you might want to consider making yours larger if you can. This will show the seller that you seriously want this home and is ready with the funds that are needed to close the deal.
- Offer a non-refundable deposit – Be the buyer that offers an additional deposit with the guarantee that if the deal doesn’t close, the sellers can keep the cash. That may be a deal that many sellers won’t turn down.
- Get a fully underwritten pre-approval – This is something that is worth discussing with your NHL Lending agent. You could request that your lender go several steps further and fully underwrite the loan in advance. The is good, but this is much better. It assures the seller that the financing will be approved by the lender. As the buyer, you may feel more comfortable about waiving the financing contingency. Even though not all lenders will do this, it is still worth discussing with them.
- Consider shortened contingency periods – Make the time go by faster by shortening the timelines associated with contingencies. Take a three-day inspection contingency. This appeals to the seller better than a standard one that can last a full week or more.
- Be flexible and agree to make up for an appraisal deficiency – Maybe you can’t waive the appraisal contingency. Things happen. But maybe you could agree to cover a portion of the difference. Go up to a certain amount that you can afford and can be comfortable with. Be ready just in case the appraisal comes in low.