It doesn’t happen all the time, but more and more frequently, home buyers are getting into bidding wars for hot new listings hitting the market.
Low inventory in certain price ranges is the driving factor and you can bet there will be multiple offers when you have three or four showings on the first day a home hits the market.
When presented with multiple offers, a seller can choose to negotiate on one of the offers or, ask all of the prospective buyers to submit their “highest and best” offer.
One reason a seller might choose to negotiate on a single offer would be the other offers are very low or undesirable for other reasons. You never know if asking for highest and best might scare a buyer away that wouldn’t want to get into a bidding war for a home.
But, the more common approach is to ask all buyers for their best offer.
When a buyer is presented with that request, the question always becomes, “What do we have to do to get this home?”
Unfortunately, there is no right answer.
You won’t know what the other buyers will be offering so, as a realtor, we are left giving what sometimes might sound like imperfect advice.
That advice is to offer the absolute highest price you are comfortable paying for that home so that, if you do win the bidding war, you don’t feel like you’ve paid too much. At the same time, if you don’t win the war, you don’t feel like you’ve left any money on the table.
You don’t want to say afterward, “I wish I would have gone up another few thousand dollars.”
There are some other aspects of your offer that can help you be that winning bid. Don’t ask for closing costs because they drive up the price, which can impact appraisals.
If you can pay cash, do it. Get a loan after you purchase the home. Most people aren’t in a position to pay cash but if you can, you’ll almost always win.
Offer to buy the home as-is. You can still put an inspection period in the agreement to ensure there are no major structural issues, but let the seller know you won’t be asking for repairs. Be flexible on the schedule. If the sellers want more time in the home, offer it. In short, the cleanest offer with the best terms will usually win the day.