Buying a house is one of the biggest financial decisions you’ll ever make. It comes with numerous emotions that range anywhere from happiness, all the way to fear.
What You Need to Know About How to Win a Bidding War
Whether you’re a first-time homebuyer, or you’re up/downgrading, you’ll more than likely find yourself in a bidding war with someone else. And, if you’re truly set on buying that piece of real estate, you’ll want to know how to win that bidding war.
Know Your Budget
Before bidding, you’ll need to know how much you’re able to spend without sending yourself into financial turmoil. When you enter a bidding war, you’ll be constantly trying to outbid your competitor. That being said, it might be very easy to go over your budget, which will hurt you in the long run.
To find this budget, look at all the numbers. How much is your mortgage going to be? Utilities? Lawyer and realtor fees? Taxes and hydro? While an asking price may not seem very high, expenses can catch up to you very quickly- so make sure you’re aware of how much you can spend.
Meet With the Bank
This is one of the most important steps when getting into a bidding war. Not only will this help you determine your budget and gauge if you’re actually able to buy the house, it will help you get things in order. When sellers are looking for bidders, they don’t always want the person with the highest bid. If you bid lower than someone, but you have your finances in order and you can show you’re serious about buying the house, you may get the benefit of the doubt. Even if this isn’t the case, you should still meet with advisors at your bank.
Contact the Professionals
Another very important thing to do when trying to win a bidding war is finding professionals and letting them do their jobs. This includes people like real estate agents and home inspectors. Having someone look at the house and talk to you about what you’re really getting into may make things cheaper. For example, if the inspector finds a flaw in the house that requires fixing, you may be able to make a smaller offer.
Make an Offer and Know When to Stop
The most important thing to do when winning a bidding war is to make the actual offer. Everything you’ve done up until this point has helped you get the best deal and give you the best chance of buying the house. But, you need to know when to stop. When your bid has hit or passed, your budget, stop. This is the point where people begin to make up excuses and try to justify their unrealistic bid. Save yourself from the financial burden and walk away.