If you’ve picked up a newspaper, watched the nightly news, perused the internet, know anyone who has bought or sold a home recently, or rubbed elbows with Realtors anytime over the past 18 months or so, you know that the Denver area Real Estate market (and many other markets across the country) is thriving. Multiple offers are a happy reality for many sellers, and if you are in the market to purchase a home, you should be prepared for the possibility of – da-da-daaaaaaaaa – a Bidding War!
This situation is a dream for most sellers, but can quickly become a tricky situation for the buyer. This is one of the many reasons I recommend bringing an experienced Realtor to the table; before you hit the ground running on your next purchase, I’ve got a few tips to help you prepare for the possibility of a bidding war on your next property transaction.
If you refuse to get all hot-and-bothered when a bidding war starts to heat up, you can keep a cool head and make wiser decisions about your purchase in the long run. Chill out! Let the seller get hot under the collar – and let your Realtor help you navigate the negotiations drama free. Know your price ceiling, and communicate your desires clearly before the back-and-forth begins.
If you lose the deal to another buyer, get your second chance in writing in the form of a Backup Offer. Until the sale closes, the deal is not a guarantee. There are several factors that could send someone else’s deal on “your house” down the drain:
- Financing may fail. Loan qualifications have tightened up considerably since the last recession, and the initial buyer’s loan may fall through before closing. Enter you – and your backup offer.
- The home inspection may send the initial buyer packing, in which case you’ll have an opportunity to negotiate further with the seller with a more thorough knowledge of the condition of the property. Legally, sellers are beholden to disclose major issues with the property that they may have been made aware of through the home inspection.
- No matter what causes the initial buyer to move on from the property you are also interested in, once the deal has moved forward with one buyer, sellers are often anxious to keep their property under contract. You’ll have the edge in moving forward with your offer.
The key to success on a Backup Offer (if you don’t win the deal initially) is to get it in writing – and to have a Realtor on your side to ensure all of the details of your Backup Offer are handled with the same professionalism as any other offer you would put forth. Ideally, your Backup Offer will be the contract that closes the deal on your chosen property, and the details matter.
Ready to start your search? Or maybe you’ve already got your eye on a gem of an investment property or your dream home? Give me a call or drop a line. I’m happy to talk shop with you any time, and autumn is a great time to hunt for your next house.