In an ideal world, you would find your dream home and buy it without any issues. Unfortunately, this does not always happen. Not only could you face competition from other buyers, but you also face the possible rejection of your bid by the seller. If you are in the market for a new home, here are some tips for crafting a winning bid.
Research the Market
Before you place your bid, you need to be familiar with the housing market in the area. Research recently sold homes and homes on the market in the area to get a general idea of what you should bid for the home you want.
It is important that you focus on homes that are comparable to the one on which you are bidding. Pay attention to the number of rooms, bathrooms, and amenities.
Use an Escalation Clause
It is possible for the seller to accept a bid that is higher than yours without you receiving the right to raise your bid. To avoid this and stay in the competition for the home, ask the seller to agree to an escalation clause.
An escalation clause is a contract between you and the seller. In the contract, you state your starting bid and an amount that you are willing to increase your bid by in the event that a higher bid is received. For instance, your starting bid can be $325,000 and you can agree to increase your offer by $5,000 over a higher bid that is received.
In the contract, you also state the maximum that you are willing to go. The contract keeps you in the competition and decreases the chance you will lose the home you want.
Offer Perks
In addition to offering a reasonable purchase price for the home, you can offer perks to the seller that would make your bid more appealing. For instance, you can offer to clean out the home. The seller would not have to worry about doing it and you have a better shot at your dream home.
Another perk you could offer is to allow the seller a chance to stay in the home for an additional period of time in case it is needed. For instance, you could agree to allow the seller to stay in the home an additional month for free if he or she has a hiccup that prevents moving as initially agreed to.
Consult with an experienced realtor to learn other ways you can increase the odds that your bid will be accepted by a seller.
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