Making an offer on a house is an exciting moment.
But sometimes, there are offers from other buyers involved.
This can result in a bidding war.
How common are these? Can they be avoided? And if so, how?
Read on to learn more.
1. Wait until the market is quiet
The property industry is seasonal.
A bidding waris more common during a seller’s market, i.e., when there are more sellers than buyers in market.
So, when houses outnumber buyers, you’re less likely to enter a bidding war. This may happen when interest rates are high. Or during major holidays, like summer and Christmas.
2. Become chain-free
Sellers view buyers that aren’t part of property chains favourably.
It reduces the likelihood of something going wrong. And it means that you can complete faster. In short, it gives you an edge over potential buyers in a chain, which is most of them.
To become chain-free, or simply better manage your chain, consider:
- Temporarily renting
- Moving in with family/friends
- Taking out a bridging loan.
3. Make a reasonable offer
Sellers will search for additional offers when they’re unhappy with the one you present.
Most buyers offer under the asking price. So, if you offer at their asking price sellers may accept it straight away.
Ask the estate agent what they think the buyer would accept. The price they’ve listed it for can also indicate their mindset.
As long as you can afford it, going in strong may benefit you in the long-run.
4. Find other advantages
You could offer to pay for sellers’ legal fees or moving costs.
You might show flexibility over completion date.
Either way, look out for what you sense sellers needs are and how you could help.
5. Build a bond
As with any kind of deal, building a rapport helps.
This could prompt them to ignore other offers and sell straight to you.
Find common ground, such as mutual points of interest. Explain your circumstances, reasons for moving, and why their property attracts you.
If you meet them, show positive body language and maintain eye contact.
If you do these things, and another potential buyer doesn’t, then you’ll be the one the homeowner wants to sell to.
6. Choose a fixer upper
Competition is low for a ‘fixer upper’ properties. This is especially true when lenders refuse mortgages for them.
Of course, you should be open to the challenge of renovating a place. Otherwise, you’re only replacing the stress of a bidding war with that of renovation.
How to win a bidding war
Points 2 – 5 above can also help your chances of winning a bidding war.
To further improve your chances, you must give the best impossible impression of yourself as a buyer. So, tell buyers that:
- Your offer will be final, i.e., you won’t try and negotiate afterwards. Of course, if something unexpected with the property appears, this might happen
- You can move quickly. Have your paperwork in order and a solicitor on stand by.
Leading with your best offer is also positive. This prevents back and forth and maximises your chances or making a higher bid than others.
