5 WAYS TO WIN A BIDDING WAR IN GREENVILLE’S CUT-THROAT REAL ESTATE MARKET
Even if you’re not in the market to buy or sell a home, chances are you’re aware of the absolute madness that is Greenville’s real estate market. If an even semi-desirable home comes up for sale it’s most likely going to be snatched up before you can say “_________.”
First, before we get started, there’s a universal truth to winning a bidding war that you have to understand: money talks. You can do everything I recommend below, do it all right, but more often than not the highest bidder will win. If you love a home enough to make an offer on it, you need to be prepared to make the best financial offer you can afford to make. Keep in mind, your real estate agent should educate on if you’re overpaying for a property since you don’t want to run into appraisal issues down the road.
Pre-Approval and the Importance of a Good Loan Officer
This is the very first step you should ever take before beginning your home search. You simply cannot purchase a home without one. A loan officer (mortgage lender/broker) will walk you through understanding the initial steps of getting a loan. They should have established a solid communication between you and your real estate agent to make sure every one is on the same page.
It is VERY important that you understand this: Pre-Approval and pre-qualification are not the same thing. A pre-approval letter shows the seller that your credit has been pulled and your file has already been started with the loan officer. Furthermore, this means that you are one step /ahead of everyone with a pre-qualification letter because you can immediately go into under-writing and close on the home faster, giving you an immediate leg up on the competition.
Having An Agent Who Can Negotiate
Greenville is constantly growing and right now there is a huge lack of housing inventory for buyers like you.
But a good real estate agent will have connections. They won’t just email you listings that kinda sorta-but-not-really fit your criteria. They will have their ear to the ground, looking under rocks, and shaking trees to find a home for you. This is how you discover homes that aren’t even for sale to the public yet and how you can avoid the bidding war all together.
Of course, that’s easier said than done. A good real estate agent will also always have your back. They will always be working hard to ensure you’re getting the best deal possible and help you submit the strongest offer you can. Nowadays there aren’t many “deals” out there, but negotiating isn’t just about money. It’s about building a rapport with the listing agent or the seller, letting them know why YOU are the best buyer for their home. You want them to make sure the seller believes no other offer will be as guaranteed to close as yours.
Attractive Contract Terms
The fewer the contingencies, the more attractive your offer will be. Of course, unless you’re paying cash, your lender will require you have an appraisal and inspection performed. Generally, it is always wise to have those done. The way to make your inspection clause more attractive is by keeping it as short as possible. You want to make sure that you and your agent have been in contact with the inspector and possibly even have it tentatively scheduled before making your offer. If you choose to forgo some contingencies, make sure you have consulted with your agent or a real estate attorney.
Earnest money is used to show the seller how serious you are about your offer. The higher your earnest money amount, the more serious you appear to be. It gives the seller a peace of mind that they’ll be compensated if you break contract. Don’t worry, this money goes towards your purchase of the home as long as you don’t breach contract.
Showing the seller that they can get their money faster with your offer never hurts. If you are pre-approved your lender should be able to get your file to the next level even faster. You should ensure that your agent has established communication between all parties (attorney, lender, selling agent, etc.). These small things can give you the ability to put a quick close date on your offer.
Be Able to Get There First
The ability to get inside a home and then be prepared to make an offer gives you a huge advantage. Assuming you’ve taken all the steps listed above, getting there first and putting a short offer expiration forces the sellers to give you quick answer.
A lot of people will now bring up that they don’t want to make such a quick decision on such a big purchase. That is a very valid point. It is so beneficial, before you even begin seeing homes, to sit down with everyone involved in decision making and go on an in-depth discovery of your NEEDS vs. your WANTS. Ask yourself, what do you need in a home to live the life that you want to live? Then, what do you want in a home but can live without? Sometimes it’s hard to determine the difference between them, but once you do it should make your decision making at least somewhat easier and less daunting.
This right here can be the NUMBER ONE way to beat out offers higher than yours, even cash offers. Writing an honest and heartfelt letter about why you love this home and submitting it with your offer can tug on the heartstrings of some sellers. Sometimes they don’t want their home to be bought up by an investor. Or perhaps your offer is really similar to another one, and they pick yours because of that letter. Don’t write a sob story or lie about anything, just be upfront and honest. When we purchase something we purchase it because of emotion. There aren’t many transactions that are more emotionally heavy than the purchase of a home, and that goes for both parties. It simply couldn’t hurt to add this cherry on top of your offer. It might make the difference of you finally having the home of your dreams.
Jonathan Anderson | REALTOR®