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You have finally saved up enough for a down payment and planning to give an offer on the house of your dreams. The thought of a bidding war may have already crossed your mind.
You’ve looked at a lot of houses and finally found the house that best suits you and your family.
Now you’re ready to put down your offer hoping it gets accepted sooner than later.
We wish getting an offer accepted was that easy and smooth. In recent years the housing market has become the seller’s market.
Especially after the COVID-19 Pandemic outbreak, things have become much crazier with bidding wars. In another article I’ve outlined some of the positive and negative takeaways from Covid-19 that you can check out today.
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What is the Seller’s Market?
Compared to the buyer’s market, the seller’s market is when there are more buyers than houses available for sale.
The process of finding our second real estate property took a while and we got outbid!
Utah has been a seller’s market for a long time now. I’m sure this is the case in other states and regions.
Even though we were outbid during the bidding war, we didn’t give up. It was difficult at first for sure but we quickly adjusted ourselves.
We became more ready for the next property we found, a cozy three-bedroom/two bath condo built in 2002.
Fortunately, our offer was accepted!
So, what can you do to get the perfect real estate property you have been looking for?
In this article, I share Six tips we learned from being outbid.
Utilizing these tips may push your offer to the forefront and give you a better chance of having your offer accepted!
Tip #1: Check regularly for new houses on the market.
Remember, it’s important to always aware and check for new houses to come out on the market.
If you find one you like, you should make an appointment to inspect the house immediately. Zillow has been a good platform to see new homes on the market. Being in Utah ourselves, we have mostly used utahrealeastate.com.
Here’s a story to illustrate why you should check for new homes…
One time we found a property (condo) we really like and were ready to check it out. We booked an appointment with the seller’s agent and couldn’t wait to see the condo!
BUT! Just like that the seller’s agent canceled our appointment and told us the seller had already accepted an offer – they had already gone under contract! So that was it, no more showings. 🙁
Unfortunately, we didn’t have a chance to give an offer but we learned some important lessons.
Having a good buyer agent to help you is very important. I still remember my wife found our second real estate property right after it came out on the market, even before our real estate agent saw it. The condo was empty inside with the homeowner completely moved out so potential buyers could go in and check at any time.
The time was around 8:00 pm at night when my wife saw the listing and our agent was still very willing to take us to check it out.
We were the first ones this time to check out the condo and also the first ones to give an offer. The next day our offer got accepted and we were under contract, hurray!!
Let’s discuss more helps tips below –
Tip #2: Ask how many people have checked the property and if there have been any offers.
Sellers and their listing agents are generally not allowed to tell about other people’s offers, especially in detail. But the seller’s agent generally wants to spread the word that a house is in high demand in order to get the best offer in the bidding war.
It is totally ok to let your real estate agent ask how many people have checked the property already and how many are going to check in the near future.
You can also have them ask how many people have shown interest in buying and if they have received any offers yet.
Asking those questions can let you know the demand (how hot) and make a better decision when you make an offer.
This is exactly what we did. You need to have an experienced buyer agent and keep in close touch with the seller’s listing agent.
Tip #3: Give your best and final offer ASAP.
Giving your best and final offer means you can leave without any regrets if the offer falls through, but don’t offer something that you cannot afford! If the final price of the home is higher than you can afford, it is not the perfect place after all.
Speaking with a lender will help you know exactly how much you can afford, but you’ll want to have extra cash flow at the end of each month for investments and savings.
“Just because you can make the monthly payment doesn’t mean you can afford it.”
Dave ramsey
If you have a real estate agent, he or she should have all resources to help you check on the most recent final selling prices and listing prices of homes in the same community.
Pay extra close attention to the highest-selling ones.
But why?…
You’ll be able to compare the real estate property you like to other homes that have been sold and are in a similar condition.
The highest sold price we saw was for a condo that was in better condition than ours but in the same general location. It was a top-floor unit and had a vaulted ceiling but our condo was on the middle floor. The top floor usually holds more value than the middle floor or bottom floor.
We REALLY liked the middle-floor condo we found and did not want to get outbid again.
Calculate Your Budget!
After calculating our budget, we decided to add $1,000 more than the highest-sold condo we found. We did this because we really liked the property and the most recently sold condo in the area was sold at a higher price and was in better condition.
We gave our best and final price, and our offer got accepted!
Oh, and don’t forget to give your loan pre-approval letter with your offer together. Your lender can help get you a pre-approval letter showing you can afford the loan amount.
Tip #4: Don’t ask too many questions before the offer is accepted.
There are a lot of questions that you might have when buying a house that you’ll want to ask the seller. You’ll want to know the condition of the house if there is anything that needs to be repaired, and so on.
I totally understand that and you for sure have the right to ask and know.
We’ve found it is really best to wait until your offer is accepted before you start asking too many questions.
Don’t let the seller and their listing agents think that you are just asking questions and are very picky. This may make them more unwilling to accept your offer because they will think you’ll be difficult to deal with and don’t like the property as-is.
We always start asking detailed questions once an offer is accepted. Especially since you will typically have a professional inspector to help you inspect the house condition later on.
Tip #5: Put down a backup offer.
If the seller doesn’t choose your offer, ask if you can put down a backup offer.
You never know, some contracts don’t always go through! A lot of homes fail to sell at the end because of buyers’ financial situations where they did not obtain the house loan successfully.
Put down your backup offer ASAP and try to be first in line just in case the deal falls through.
This is what happened when my parents sold their house. The family who was going to purchase their property failed to get the house loan due to some financial problems.
Then my parents quickly decided to accept a back offer which worked out great.
Tip #6: Have faith in more dream homes to come!
Don’t give up if you’ve been outbid!
As mentioned in the beginning, our search to find our second real estate property took longer than we expected and we actually got outbid once.
Being outbid was a disheartening experience no doubt.
We quickly adjusted and learned our lesson from our outbid experiences. There will always have good new properties coming out on the market!
We eventually found a cozy three-bedroom/2-bath condo built-in in 2002. The previous owner had new painting and flooring done which made the property attractive to a young couple like us.
The location was also very close to our college, our first real estate property, and my company back then. On top of that, the condo was also only 3-5 minutes from Walmart, Costco, and other shopping districts! Talk about an awesome location!
Remember in the meantime there is more than one way to invest in Real Estate; that’s why we love Fundrise!
A great way to start investing in real estate without a lot of money is with Fundrise, a crowdsourcing real estate investing platform.
With investment minimums of ONLY $10, you can start making PASSIVE INCOME with your real estate investment portfolio!
In Conclusion
Here is a summary of the 6 tips to help you during a bidding war.
- Tip #1: Frequently check for new houses on the market.
- Tip #2: Ask how many people have checked the property and if there have been any offers.
- Tip #3: Give your best and final offer ASAP.
- Tip #4: Don’t ask too many questions before the offer is accepted.
- Tip #5: Put down a backup offer.
- Tip #6: Have faith in more dream homes to come!
In recent years it has been a seller’s market, especially after the COVID-19 Pandemic outbreak where the bidding war has become much more terrifying.
Many properties we knew of received over ten offers in just one day after they went on the market!
One of our friends got outbid six times until his offer was finally accepted.
We hope these experiences and tips can help you win in those crazy bidding wars!
Wish you all the best in finding your dream home that fits your and your family’s needs. 🙂
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
