When you're looking at Morgantown homes for sale, it's easy to find one you fall in love with!
Many places throughout the United States are in the midst of a "seller's market." Low housing supply combined with relatively low interest rates means more qualified buyers competing for fewer homes. When you bid, you may find yourself against two or more would-be buyers.
Our real estate agents want to ensure you're prepared!
A bidding war breaks out if multiple qualified buyers work to one-up each other, sending in better offers to woo the seller. You might think the odds are against you in this situation and consider walking away—but don't be hasty. You may come out on top if you strategically approach things.
Your real estate agent is a staunch ally throughout the process. The agent's role is to keep you informed and on track. A bidding war can often be an emotionally charged time for buyers, so it's vital to take the right steps. There are many pitfalls that can trip you up if you're not careful!
Let's take a closer look at bidding war mistakes to avoid:
• Bidding Too Low
Be aware whether your seller has a real estate agent or is going it alone (called "for sale by owner" or FSBO). Sellers with agents usually have a price in mind very close to market value, or what agents call "priced to sell." Those without may have a price far above the home's value! An offer must be attractive to the seller, but it shouldn't reach too far beyond the average for comparable homes.
• Making the Minimum Deposit
The deposit on a home is also known as "earnest money" because it demonstrates to the seller that you are serious about buying. In general, the deposit should be no less than 5% of the sales price, and it can be higher—10% is a good starting point in a seller-driven market. Sometimes, a seller will clarify the desired deposit directly on the listing. If you're not sure, check in with your real estate agent.
• Including Too Many Conditions
Conditions and contingencies restrain the seller without offering them anything in return. For example, a contingency that the sale proceeds only if you successfully sell your own home first is one of the biggest and most difficult of all. Limit conditions to those that are absolutely necessary to protect your interests. Most buyers using conventional financing will need to perform a home inspection, so don't yield there
• Offering Too Late
If a seller is holding offers until a specific date, incorporate that into your timeline. Do all your due diligence early, including in-person visits, and get your offer in by the specific time of day requested. If you are even one minute late on these precise deadlines, you will probably not be considered for the home. This is all part of "playing ball" and catering to the seller's needs.
• Tipping Your Hand to the Competition
Sellers have the option of reviewing offers before offer day—called pre-emptive bids—or not. The listing will usually specify if pre-emptive bids are not entertained. If this is the case, follow the rules and do not submit an early bid. You'll be in a weaker negotiating position if you jump the gun. Plus, the seller's agent may be required to inform all potential buyers about the bid, sparking more competition.
Contact us to discover more about local real estate.