Ask Phyllis: a blog series of frequently asked real estate questions. Email us here
Dear Phyllis,
Last year, we made offers on three homes, getting outbid on each one. We would like to try again. What advice can you offer on how to win the bidding war?
Laura
Dear Laura,
Home buying 101 – first things first: The seller and their agent (the listing agent) want to be in escrow with a qualified buyer. They don’t want drama and they would prefer to be in escrow with nice people. Your goal as a buyer is to package yourself to fit the seller’s needs:
o Work with an experienced local Realtor. Your real estate agent should be well regarded among her peers (you can tell when they show you homes how they interact with other agents).
o You can have your Uncle Joe do your loan, but when you present your offer, have a preapproval letter from a local, well regarded lender. Just like Realtors, not all lenders are well regarded.
o Included in your purchase offer, should be your preapproval, a “love” letter from you and evidence of your down payment and reserves. When representing the seller, I prefer to see a buyer who will have money remaining in the bank after their down payment. A cash strapped buyer can’t afford to make repairs after their home purchase. After the physical inspection there is always some item that needs attention sooner rather than later.
In order to win the bidding war it’s helpful for your Realtor to play detective:
o Your agent needs to learn the seller’s needs. (When there is more than one offer, sadly, it’s about their needs, not yours). When does the seller want to close, move out, etc.?
o In a multiple offer scenario, do not ask for personal property without being absolutely certain that it will not impact your offer. Your Realtor® can simply contact the seller’s agent to find out.
o Your agent needs to learn when offers are due and when they will be reviewed. In the event of questions, your agent must be available via cell phone when the seller is reviewing offers. This is critical, if there are questions and your agent goes MIA, you likely won’t be the successful bidder.
How the buyer can shine:
o Firstly, if you have the opportunity to meet the listing agent, introduce yourself. If your Realtor is with you, even better, if not, let the listing agent know your Realtor’s® name and company affiliation. Be polite.
o Next, when you write your “love” letter to the seller, tailor it to their situation. Did they raise their family there? Was there a divorce? Focus on why you will be a dream buyer and why you love their home. Don’t mention any changes to the home you have planned; you do not want to offend the owners. For example, perhaps they wanted to make the same changes and never had the funds. Finally, ask your lender to contact the listing agent and let them know how well qualified you are.
Good luck on your home search!
