Friday, October 5, 2018 / by Joe Corbisiero
Inventory is extremely tight right now around San Diego and the good deals are going fast! I don’t think there is a scenario more dreaded for a buyer than when faced with a bidding war on a home. They can be stressful and discouraging if you don’t get the home you really wanted, but it’s part of the process.
Unfortunately, when there is a bidding war on a home, you have the potential of overpaying. The process can turn emotional and many times buyers will let their emotions get in the way of making a sound financial investment. I am writing this post today so you know what to do in case you find yourself in a bidding war.
Know The Market!
You will be able to negotiate and be more comfortable with your offer knowing the true value of the home. Getting educated on the market is the first thing you want to do! Have an idea of the range the value should be in and keep your offer within that range. When you have a good idea of the values, it makes it a lot easier to make a decision much faster. One of the ways to avoid a bidding war is to avoid allowing time to pass by when a newly listed property hits the market. The more time that goes by, the more chance of other buyers seeing it and potential offers coming through.
Having a good agent in your corner is one way to do this HINT HINT HINT! It’s my job to make sure you make a sound investment! I don’t care about what you buy because I’m not living there.
Know Your Budget
Before you start shopping for
When getting started with buying a new home, you should consult closely with your lender. You want to know how much every $10,000 on a loan amount will affect your total monthly payment. This will allow you to engage what you can truly offer in a bidding war situation. You don’t want to lose out on your dream house over $7,500 when you learn that the difference in your housing payment was only $36 extra per month, do you?
Is the home worth paying more for?
How long are you going to live there? There are some scenarios where a certain home type is rare. If you think you are in one of these situations, you need to ask yourself if it’s worth paying a little more. I would focus on how long you will be occupying this property and working your numbers from there. Overpaying for a property isn’t always a bad thing when the market is on an upswing. In 6 months your purchase price could look like a good deal.
Buying a home is an investment, but it’s also a place to live. You want to calculate all things when buying a house, such as your annual interest and property tax deductions. These also play an important role in your overall investment and many times are overlooked.
Do not get emotional.
This is where your real estate agent should be really helpful. People that don’t negotiate a lot tend to get emotional when they do. Emotion will cause you to overbid and get into a win-lose mentality. That isn’t a good mindset to be in. Do your best to keep
Get a good Realtor who will tell you when to walk away and when to go up in price. When you trust your Realtor, much of the stress will be relieved. Just know that for a Realtor this is a business situation and their advice will come in handy.
These are a few quick tips to consider if you ever find yourself in a bidding war situation. Keep these in mind and you should do well. If you have any questions about this or anything real estate related please contact me. I would be happy to help.