5 Secrets to Winning the Denver Real Estate Bidding War
Home prices are up, but homes available for purchase are still down. This is a formula for a bidding war frenzy. We are expecting the real estate market to be very similar to the past three years. Home prices will likely climb, and while we anticipate more homes hitting the market, there will not be not enough to keep up with buyers’ demand. Multiple offers are a classic example of economic realities because they appear when the supply of homes for sale is limited and the demand for good-condition homes is strong.
WINNING TIP #1: BROKER LOVE LETTER
WINNING TIP # 2: GET CREATIVE
List all of the line items in the contract where you are saving the seller money.
- Maybe you ask your buyer to pay for a couple of line items the seller typically pays for.
- Who is the seller using to provide title insurance? Perhaps you could save the buyer and the seller money by switching companies.
- Maybe your buyer can be flexible on the close date.
- If the home does not appraise does your buyer have the means to make up some of the difference? Talk to the listing agent to find out what is motivating the sellers and what they need — such as a quick settlement or a post-settlement rent-back, Be flexible, and work that into your offer.
Make it as easy on the sellers as possible so your offer is chosen above 15 others. A higher-than-customary earnest money deposit can sometimes impress sellers when there is a bidding war, just make sure you fully meet all deadlines and terms of the contract so you don't lose your deposit.
WINNING TIP #3: ELIMINATE OR REDUCE CONTINGENCIES
Many brokers are starting to eliminate inspection and loan approval contingencies. In some states like California, this is the only way to get a home because the demand to find a house is so high. Personally, I like to keep the loan and inspection contingencies if possible, so I can protect my buyer's earnest money. One good alternative would be a clause in the contract stating earnest money will be non-refundable after inspection and make sure you have 10-15 day to get the inspection complete. This will give the lender time to completely review your clients' ability to get a loan and if the lend thinks there might be problems your client can make the decision if they are willing to lose earnest money if they do not get approved for the loan.
WINNING TIP #4: GIVE POSITIVE REFERENCES/ TESTIMONIALS
I give three brokers I have worked with in the past where the transaction went smoothly so the listing broker has the option to call and see if I’m the type of broker they would like to work with.
WINNING TIP #5: IT'S ULTIMATELY THE SELLER'S DECISION
Most people think the highest offer always wins the bidding war. Sometimes this is the case; however, any experienced broker knows there are many obstacles to overcome before getting to the closing table. If you communicate clearly to the listing broker that you and your seller can get to closing without any headaches, the listing agent will express this to the seller and hopefully, the seller will take the listing agent's advice. If you are not the highest offer, there is also a chance the listing broker will counter your offer with the highest offer.
GET IN TOUCH
Did you know it is possible to purchase a Denver Metro home in this market without being in a bidding war? Give me a call at 303.887.0588 and I will give you a couple tips and tricks I use to get buyers under contract without being in a bidding war. barry@porchlightgroup.com | (303) 887-0588
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