Tips for Bidding War Buyers
The Boston area real estate market is historically competitive this year, making it more likely home buyers there will need to know how to contend with a bidding war, reports the MetroWest Daily News. Yet the article reports there is a difference between winning and committing beyond your means. Darren Rubin, a counsel attorney at Canner Law, gives potential home buyers three pieces of advice for buying in a competitive market.
A good buyer’s agent is key
Rubin first recommends working with a good real estate agent, particularly one who is punctual, communicative, and level-headed. This is necessary to have timely and clear communication with the seller’s listing agent. Beyond the buyer’s offer price, a good relationships between real estate professionals on all sides works in your favor as a buyer.
Some bidding war tactics involve more financial risk
The article reports risk assessment is another key consideration in a potential bidding war scenario. Several buyer tactics have reportedly been shown to boost your chance of a winning bid, however, some tactics may leave you more exposed than others.
For instance, waiving a financing contingency and agreeing to forfeit the deposit if a buyer can’t get approved for a mortgage reportedly increases the odds of winning the sale by 57.9 percent. However, for considerable less risk to the buyer’s finances, writing a heartfelt cover letter can boost a buyer’s chances by almost as much, at 52.5 percent.
Escalation clauses, all-cash offers, and inspection contingency waivers are said to be other popular tactics. However, each carries risks that should be weighed carefully by the potential home buyer.
Listen to your instincts
Lastly, the report recommends paying attention to your instincts. That is, if a home offer feels too risky for a buyer, it probably is. Rubin recommends that buyers be confident about their offer and any potential risks they accept before proceeding. “Before taking a risk with the inspection or financing, consider: what is winning this home worth, and at what point does winning just become winning?” he asks.