When the supply is low and the demand high, getting into a bidding war might be the only way for you to buy the home you want. To be successful, you will need to engage the services of a knowledgeable realtor. To be sure you are on sound legal footing, you should also seek the help of an attorney experienced with Connecticut real estate matters.
You must be well-prepared to enter a real estate bidding war. Here are five tips for coming out a winner.
1. Obtain a pre-approval letter. Pre-qualification only confirms your income and how much a bank might lend. Pre-approval means you have a letter from your bank that states your lender has underwritten your application for the home you want and is only awaiting the appraisal.
2. Limit contingencies. Sellers want clean, concise offers. You will catch the seller’s attention if you avoid making too many demands and adding too many contingencies in your bid.
3. Add an escalation clause. Adding this into your bid confirms that you are willing to increase or escalate your offer up to a certain figure if the seller receives others that match or top your original bid.
4. Offer a flexible closing. Perhaps you can give the seller more time to move out or offer to close sooner than later on a house that is vacant. Flexibility will help move you to the front of the line in a bidding war.
5. Write a letter to the seller. If this is the house of your dreams, writing what amounts to a “love letter” to the seller could make all the difference. Do not overdo it, but explain why this would be the perfect house for you and your family.
To survive a bidding war, you must be thoroughly prepared to do battle. With your pre-approval letter in hand, your realtor can help you put together a great offer, and your attorney will ensure that you make no legal mistakes on your way to purchasing your dream home.