Okay, Shoreline, WA home buyers… Have you heard horror stories about buyers trying to get a home under contract, and ending up in a bidding war – with the same seller receiving, three, seven, even a dozen offers on their home for sale?
We all know the whole Seattle has a real estate market is inescapably hot. It can come and go with the season and the year, but even after Coronavirus and CHAZ/CHOP, we had a huge buyer demand from folks wanting to buy property in Seattle. In fact, in July 2020, Seattle was listed as the country’s #1 Most-Recovered Real Estate Marketplace by realtor.com. Shortages in real estate listings (no one wanted to sell while sheltering in place) pushed the city’s housing supply, once again, into a multiple offer zone.
Now – this is great if you’re selling your home. And yes… if you’re thinking about selling in the Seattle market today – please call me, goodness knows we need more homes on the market! Getting multiple offers and starting a bidding war is the ideal situation for a seller….
But… a bidding war isn’t always so great for buyers. If you’re a Shoreline home buyer, you need to strap on your safety harness and get ready to come out swinging! As a buyer caught up in a bidding war on a Shoreline, WA property, you need some way to rise above the competing bidders – *without* offering a ridiculous amount for the purchase price. Let’s be real – sometimes buyers get so carried away the house won’t even appraise for what they’ve said they’re willing to pay.
Fortuntely, there are indeed some effective tactics and strategies you can use to win the home of your dreams even in a competitive real estate market. Here’s how to win a bidding war on a Seattle property.
Have Cash in Hand
Without a doubt, one of the best ways to win a bidding war on a Seattle property is to arrive with cash in hand. Nothing speaks as loud as green, but it’s not just the tempting sight of all that cash.
When you have cash, sellers know that they won’t have to wait for you to secure financing and that there won’t be the possibility that the loan might not even come through. They know you’re a serious buyer and have the resources, so they may even reduce the price a bit to get that fast cash. On average, having cash in hand can double your chances if winning a bidding war.
Or Have Your Pre-Approval Letter
Not everyone, though, is able to win a bidding war with cash. So the next best thing is to get a pre-approval letter from your lender and come to the war armed with that. This is different from getting pre-qualified and has much more clout. A pre-approval letter tells the seller that your lender has already underwritten your application, and the only thing still pending is the appraisal. Having a pre-approval letter will put you ahead of all the other bidders who don’t have one and who still have to go through the approval process.
Employ an Escalation Clause
Another good tactic for winning a bidding war on a Shoreline, WA property is to use what is called an “escalation clause.” This clause will allow you to strengthen your position in a multiple-bid situation.
An escalation clause is an addendum to the contract that states that if other bidders make bids matching or topping your initial bid, you are willing to incrementally increase your offer up to a certain cut-off point. Such an escalation clause indicates that you have a strong interest and are a serious buyer, but will also allow you to walk away without obligation when the competition gets too stiff. In addition, many escalation clauses will allow your bid to stand for 20 days in case the winning bidder can’t deliver in the end.
Go Easy on the Concession Requests
Another way to win a bidding war is not by offering more money, but by asking for less in the way of concessions and contingencies. A seller just might be willing to take a lower offer from a buyer who is making fewer demands. For example, avoid asking for an extended closing or repairs to be made or for closing costs to be paid. It will just make your offer more attractive in the eyes of the seller.
Your Ally in the Bidding Wars
Really, though, these are just a few of the many tactics you can deploy to win a bidding war on a Shoreline, WA property. You can also, among other things, write a letter directly to the seller, be flexible on closing, and let it be known that you’re prepared to walk away.