When you find the perfect property, whether it’s a farmhouse in the country, a pied a terre in a hotel-condo hybrid like One Dalton, a fixer-upper you’re eager to turn into an investment property, or a perfect co-op in the city of your dreams, it’s important to act fast. However, as many who’ve missed out on a prime real estate opportunity can attest, getting the perfect place is not just about finding the right property at the right time, it can also take some serious negotiation skills. In many hot markets, properties go for thousands, or even millions, over asking their asking price, and those without well-honed negotiation skills often find themselves missing out.
Luckily, if you’re eager to get that perfect piece of property you’ve got your eye on, there’s hope. Armed with these easy tips for bidding war success, all that’s left to do is sign on the dotted line:
Before you even start the process of looking for a home, it’s important to have pre-approval for a mortgage from your bank or other lending entity, proving to the seller that you’re a good candidate for buying a home. This is important in any market, but in particularly desirable buildings, like The Kent on Manhattan’s Upper East Side, you won’t even be able to get a foot in the door without pre-approval, much less make it to the bidding round.
Start with a high offer:
While you obviously don’t want to overplay your hand, coming in with a soft offer will quickly have sellers ruling you out before you even get a chance to play. If you’re serious about buying a particular piece of property, it’s not the time to come in with a lowball bid. Instead, coming in with a strong bid, preferably one that’s already slightly over asking price, will make you more attractive in the eyes of a buyer when other bids start coming in.
Give it a personal touch:
All’s fair in love and real estate. While it may seem like a strange approach to take, giving your bid a personal touch can tip things in your favor. Before you get into a tense bid-off, try scheduling time to meet with the owner and talk to them about your plans for the property. If you can’t find time to do that, write them a letter. And it doesn’t hurt to play on their sympathies, if the seller Is all about family, talk to them about how eager you are to raise your own family in their home if your offer is accepted. If they’re passionate about golf, tell them that you’ve already got your clubs ready to start teeing off in the yard.
There are some things you’re just better off paying cash for: a holiday tip for your doorman at luxe buildings like 985 Fifth Avenue, your kids’ allowance, and, in many cases, real estate. If you want to be ultra-competitive in a bidding war, it pays to have as much cash to hand over as possible. While other buyers are dealing with lenders, your cash offer will stand out from the pack and make the seller know you’re serious about snagging that perfect piece of property. Even if you can’t offer the full amount in cash, coming up with a significant portion of the money, or even just more than the standard 20 percent down payment, will make you a more attractive buyer.
Agree to a specific closing date:
If your seller has a specific closing date in mind and you’re intent upon winning a bidding war, make sure you make it known to them that you’re willing to close whenever they want. However, before you offer this to your seller, make sure you have all your ducks in a row, being able to offer a specific closing date to the seller means having pre-approval, a lawyer, home inspector, and other details already worked out.
Say no to contract conditions:
If you really want to close that real estate deal quickly and beat out other eager buyers, it’s time to do away with those contingencies. While most buyers have clauses in their contracts specifying that they won’t buy a home if, for example, it doesn’t pass an inspection, removing those conditions, while risky to you, can make you a more attractive buyer, helping you knock the competition right out of that bidding war.
Finding that perfect piece of real estate to call your own is just the beginning. If you want to ensure that you end up with the keys to your dream property in hand, there are a few steps to take before turning that vision into reality. Luckily, with a little knowledge, a little skill, and some careful planning, you can win that bidding war and turn that property you’ve always wanted into something better: your home.