The real estate market is red hot in West Los Angeles and the surrounding areas, making real estate bidding wars commonplace for buyers. However, there are a variety of strategies that the homebuyer can use to combat this phenomenon and land the home of their dreams without overpaying.
Reduce Stress for the Seller
When there are competing offers, the seller will often times go in the direction of least resistance. For the buyer, this means doing everything possible to make the process simple and straightforward for the seller. Some suggestions on lessening the amount of hassle for the seller are:
- Instead of just getting pre-qualified, get an underwritten pre-approval, showing that your loan file has been submitted to an underwriter and guaranteed.
- Consider paying in cash. It is a growing trend that currently encompasses over 40% of the market. The sellers may be relieved not to have to wait for an approval process.
- If you can’t pay in cash, consider putting 20% or more down to prove to the seller that you are serious.
- Consider an escalation clause, a verbal agreement with the seller’s broker that allows you to give a set counter offer in the event of a competition.
- Be flexible in your contingencies. Make them reasonable and short. Have an appraisal lined up before submitting an offer and hire an inspector within days of submission. If you can afford to temporarily float 2 mortgages, consider not making the deal contingent the sale of your current home.
Don’t Wait for Open Houses
Be proactive. Schedule an appointment with your realtor as soon as an intriguing listing comes on the market and submit an offer quickly to preempt competition.
Forget Lowball Offers
Know what you are willing to pay and come in with a strong offer. Don’t risk getting off on the wrong foot with a seller, or they will surely go in the direction of a competing offer.
Know Your Seller
It is not unknown for a prospective buyer to personalize a transaction by writing a letter to the seller to express willingness to work with their needs and explain why the house is the perfect fit. If there are several offers on the table, having a connection with the seller can make your offer rise to the top.
Expect the Process
Consider bidding on a property slightly below your max price range, giving you some flexibility in anticipation of a bidding war.
Choose a Local & Well-Known Agent
Having an agent on your side that knows the local landscape, understands the listings and has developed a rapport within the community is a major asset. They can access the inside scoops on properties and sometimes secure showings before a house is listed, ensuring that their clients have an advantage in the bidding process.
No Comments