Dear Kathe:
A friend of ours lost in a bidding war for a home – if we find ourselves interested in a home that everyone else is also interested in, how can we win?
Our market is getting hot right now and bidding wars are starting to happen once more. Buyers, there are a lot of important lessons to be learned here. The first and most important is that it is always better to avoid a bidding war! If you see a home that you like, do not delay! Our inventory levels are at historic lows and there are too many buyers entering the buying pool. Don’t sit by the sidelines over-analyzing. Make an offer!
Lesson two: if you find yourself in the unenviable position of being in a bidding war, ask yourself: What price is it at which, when you see the home sale amongst the sold transactions in the Sewickley Herald, will you say “darn, I would have paid that price.” If that’s the way you feel, that’s what you should be offering. Consider at what price, when you read the Sewickley Herald, you can sleep at night, knowing you “would never have paid that much for that house.” Offer just below that price, and know that you gave it your all and will, in fact, be able to sleep at night if someone else wins.
Lesson three: do know that a request from the seller for your “final and best offer” does in fact mean your final and best offer. There will probably be no second chances. Refer to step two above in determining that price, and then do not pull back thinking you will be leaving money on the table if you offer significantly more than the other bidder. You will be enjoying the home for years to come and it just won’t matter when you are the one inside and not the one driving by outside, pining about the one that got away! So give it your very best shot! Do not assume that you will be given a second opportunity to improve your offer either – offer your best offer out of the gate to increase your chances of success.
Sellers, a special message for you: bidding wars are starting to happen once again, but if you want to be the subject of one, you must still prep your home perfectly and price it realistically. Today’s buyers are very savvy and while prices are inching up, it’s a slow and steady rise and sellers who prepare their homes (see my blog for advice on what to do) are the most highly rewarded!