The Biggest Hurdle for Buyers? Winning a Bidding War
Home searches are lengthening as buyers find themselves up against steep competition. Sixty-four percent of buyers who are actively engaged in the home-buying process reported searching for three months or longer without success, according to research from the National Association of Home Builders reflecting first-quarter data.
These long-term home searchers increasingly are blaming bidding wars. Forty-five percent of house hunters looking for three months or longer say they keep losing bidding wars. That was the top reason over finding a home at an affordable price or being able to find a home they want.
Long-term house hunters are not giving up, however. Fifty percent of active buyers who have searched for three months or more say they will continue to hunt for the right home in their preferred location. Forty-two percent plan to expand their search area; the share of buyers willing to do that has grown from 34% a year earlier, the NAHB reports. Twenty-eight percent of respondents said they’d be more willing to accept a smaller or older home than they originally intended, and 24% were willing to buy a more expensive home.
Source: NAHB
A few strategy tips for winning a bidding war:
Get Pre-Approved by Your Lender
One of the first things you should do if you’re going to be looking for houses in a hot market is get pre-approved by your lender. Then, your pre-approval letter tells the seller and their agent that you are going to be able to afford the house, and it minimizes the risk of your financing falling through. When you have a pre-approval letter in your hand, it means that you are very serious and you are ready to buy.
Go All-Cash and Skip the Contingencies
Consider offering a cash offer...you’re likely to go to the top of the list. A seller won’t have to worry about you having financing problems. Cash sales save time throughout the entire process, too, because there’s no underwriting to go through. Don't have the funds to pay in cash? Consider Ribbon Cash.
Keep Your Offer Clean
The fewer contingencies and add-on requests you have, the more appealing your offer will be to the sellers.
Bottom Line
A final takeaway when it comes to bidding wars—don’t get so caught up in the heat of the moment, or the love of a certain house, that you make a financial mistake. It’s easy to get wrapped up in a bidding war that you're willing to win at all costs. You need to know when to walk away from a deal, as hard as that may be at the time.
In this highly competitive market, I provide buyers with the strategies and guidance needed for a successful buying outcome while looking out for your best interests. If you've pressed pause on buying a home, now may be the best time to put your plans back into motion while interest rates remain low. Contact me today to get the process started. I'd love to help!
Mobile: 919-675-5366
E-Mail: Jean.Scott@kw.com
Two Locations to Better Serve You:
Raleigh: 4700 Homewood Ct., Suite 200, Raleigh, NC 27609
Wake Forest: 1744 Heritage Center Dr., Suite 201, Wake Forest, NC 27587
