The Truth About a Bidding War
Every actively searching buyer out there is probably familiar with this harsh reality called a bidding war. The single most frustrating thing for buyers is simultaneously the signal of victory for sellers. As in the Art of War, “If you know the enemy and know yourself, you need not fear the result of a hundred battles - Sun Tzu.”
Applied to real estate, this means that to win as a buyer you must think like a seller. If I were selling, would I favor an offer with a waived home inspection over another offer that has this contingency at $5000 less… Is the highest offer with a mortgage contingency worth more to me than cash at asking… These are important to consider.
As for a seller listing their home, they must put themselves in the buyer’s shoes. Would I offer on this home if it is clear the homeowners did not maintain the systems and did little to present it well for viewing as it is clear they are hoarders… Would I offer on this home if after doing research with my agent, the home is clearly $50k over-priced and was priced improperly alongside new construction? These are equally as important to consider.
Can buyers win a bidding war without being the highest offer price? It is our experience that the answer is surprisingly, yes. Will the highest offer price win most of the time? To be honest, yes. However, let us offer two primary weapons in your arsenal for making your offer strong without going wayyyy over ask. These are the weapons; timelines and terms.
First, timelines that favor a seller’s timeline can be more attractive than merely the highest offer among many. In one experience in Somerville, an offer on a single family home over a million in Davis Square had at least 4 offers. After asking what was important to the seller besides a desirable sales price, a flexible and extended timeline was strongly preferred. Our offer was accepted because we adjusted our timeline to what the seller desired. Ours was not the highest offer.
Secondly, demonstrated In another recent situation in Roslindale, there were more than 10 offers and terms played a large role. Though our offer was not the highest, we had the best timeline for the seller and the least red tape concerning contingencies. In this case, this meant we had an inspection contingency but with such a high threshold, that the sellers felt assured that we’re not going to “nickel and dime” them.
For sellers, we lay all the offers on the table and examine more than the offer prices. The quality and strength of their pre-approval letters, terms and contingencies, timelines, and even who the buyer’s agent is are important guideposts for our sellers. To be honest, we are striving to get top dollar for our sellers but not at the expense of what may become a faulty and exploding deal for the sake of the highest price. Getting both sides to the closing table, at the highest price, with the best terms and timelines means calibrating many aspects of each and every offer to determine the best one for our sellers.
If knowledge and experience is power, we have the power to help buyers win bidding wars and the power to help sellers obtain the highest price, with the least amount of hassle, in the most favorable timeline desired. Email us at firstname.lastname@example.org
to get moving!!