The Secrets to Winning Bidding Wars in Real Estate

If you are looking for a median priced home in the Denver metro area you will likely face a multiple offer situation at some point in your home buying process due to high demand and very low inventory. So what can you do to get a leg up on your competition and finally come out on top? Here are a few tips:

1. Put your strongest offer forward. Every.Single.Time.
Gone is the day of sellers countering offers and escalation clauses getting the job done. Sellers want the highest number you are willing to go to, tons of flexibility with moving time frames, very few contingencies and very tight deadlines. And why wouldn’t they? If they have 50 offers (yes, that is happening) to review they won’t waste their time with negotiations.

2. Make an emotional connection with the seller….if advised.
Buying and selling real estate is an emotional experience,so why not try to connect with the sellers of the home on an emotional level? Were you in the military and notice military memorabilia in the seller’s home? Touch on that in a personal letter to the seller. Notice floral paintings in the seller’s living area? Leave a tasteful bouquet of flowers in the kitchen. People thrive on connection to other people, so pay attention and creatively try to connect. Caveat—it is a good idea for your buyer’s agent to run ideas by the listing agent to make sure that you aren’t inadvertently hurting your offer.

3. Make sure your agent is speaking with the listing agent PRIOR to submitting an offer.
This is just good common business sense. Your buyer’s agent should be asking questions about how to make your offer stronger (maybe the seller would really like a free 2 week rent back after closing?), advising the listing agent to expect an offer (so that another offer isn’t accepted in the meantime), etc. Once again, personal connection makes a difference. Sellers and agents want to do business with professional, competent, honest individuals; make sure your agent is portraying these attributes on your behalf.

4. Do your homework.
In any multiple offer situation it is very easy to get in over your head very quickly. Make sure your agent is giving you feedback on what the actual market value is for the home on which you are putting an offer. If you are obtaining a traditional loan, the lender won’t lend above appraised value and you will be on the hook with making up the difference between market value and your contract price…don’t just assume that the seller will renegotiate the contract price. Do your homework…the right house will come along; don’t get stuck overpaying for a property you don’t love.

5. Be flexible.
Consider staying with friends or family on a short term basis while looking for a home. Offer long seller property contingency times (if needed) and free rent backs to the seller (if desired). Set realistic expectations and make appropriate concessions.

Lastly, and most importantly, make sure you have a good real estate adviser working on your behalf!