6 Ways to Win a Bidding War
6 Ways to Win a Bidding War
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Mar 14,2024

6 Ways to Win a Bidding War

In the competitive real estate market, winning a bidding war requires strategic planning and swift action. With high demand and low inventory in many areas, multiple offers on a property are becoming more common. Suppose you’ve found a property worth investing in. In that case, it’s essential to use a reputable property management company or real estate expert for effective tactics that can help you win the bidding process. At 3 Options Realty, we leverage extensive expertise and knowledge to help you maneuver the process and emerge victorious. Here are six effective strategies to increase your chances of winning a bidding war:

Get Pre-Approved by Your Lender

Before engaging in bidding wars, ensure your financing is in order. Getting pre-approved for a mortgage shows sellers you are a serious buyer with the financial capacity to follow through on your offer. This strengthens your position and speeds up the closing process, making your offer more appealing in a competitive market.

Go All-Cash If You Can

One of the most powerful weapons in a bidding war is an all-cash offer. Cash buyers eliminate the risk of financing falling through, which can be a major concern for sellers. If you have the means to make an all-cash offer, you instantly gain a competitive edge over other buyers. Sellers often prefer cash deals because of their simplicity and expedited timeline, making your offer stand.

Write a Letter

Sometimes, a personal touch can make all the difference in a bidding war. Write a letter to the seller, voicing your appreciation for their property and detailing why it would be the perfect fit for you and your family. Personal anecdotes and genuine compliments can create an emotional connection with the seller, leading them to choose your offer over others.

Skip the Contingencies

In a competitive market, having too many contingencies in your offer can strengthen your position. While contingencies protect buyers, they can also give sellers concerns, especially when multiple offers are on the table. As a trusted property management company, we recommend waiving certain contingencies, such as the home inspection or appraisal contingency, to make your offer more appealing. However, proceed with caution and consult with your real estate agent or professional property managers to understand the risks involved.

Offer a Big Deposit

A sizable money deposit expresses your commitment to the purchase and assures the seller that you’re serious about closing the deal. By offering a larger-than-usual deposit, you show the seller that you are invested and are less likely to walk away from the transaction. This gesture can instill confidence in the seller and gives your offer an edge over others with smaller deposits.

Use an Escalation Clause

An escalation clause can be a strategic tool to outbid competitors in a bidding war while ensuring you don’t overpay for the property. This clause automatically increases your offer by a predetermined amount above competitors to a specified limit. It allows you to remain competitive without constantly revising your offer manually. However, it’s essential to set a cap to prevent exceeding your budget inadvertently.

Winning a bidding war requires preparation, strategy, and flexibility. By implementing these six tactics, you can increase your chances of securing your dream property in a highly competitive market. Contact us at 3 Options Realty to schedule a consultation with our expert property managers. We provide customized strategies to address your specific situation and maximize your success in the bidding process.

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