How to Win a Bidding War

Although home prices and inventories are inching up, bidding wars remain common. Redfin reports that 69 percent of listings received multiple offers in June, up from 64 percent a year ago and 50 percent two years ago but down from 76 percent in this past March. Some agents have seen more bidding wars this year than during their entire careers. Pent-up demand, a strengthening economy, still-low mortgage rates, and a jump in investor purchases have fueled the phenomenon; but experts say markets could begin to cool as mortgage rates rise. Buyers who want to win bidding wars without overpaying must keep abreast of neighborhood sales activity, avoid low-ball offers, calculate how high they are willing to go, and stick with their “walkaway number.” They also should be flexible on closing dates and other terms, be willing to act as soon as they find a house they want to buy, get prequalified for a mortgage, and have a plan for dealing with a low appraisal. Additionally, buyers should be willing to act as a backup in the event that another buyer walks away from a deal; and they should connect with sellers on a personal level through introductory letters, which can help them stand out from the competition when accompanied by a serious offer. | Read More