The start of 2021 brought great uncertainty to the housing market. With 2020 setting record-low mortgage rates and homes flying off the market (CNBC, 2020) https://ecs.page.link/sa6zn, it’s easy to assume people would be wary of a crash. Well, as we all know - 2021 is booming. It’s now harder than ever to purchase a home! Homes that would go for $200,000 are now selling for $30,000 above listing price because of bidding wars (Realty Biz News, 2021) [https://ecs.page.link/H1hEt]. If you’re searching for a home and you’re finding yourself in a bidding war, keep reading for a few tips on how you can set yourself apart from the rest.
If you want to show the seller that you’re serious about buying their home, you must submit a pre-qualification letter. A pre-qualification letter shows sellers that your finances are legitimate and have been vetted by a mortgage company. This letter is crucial, especially in a bidding war! The seller doesn’t want to waste time with a buyer who cannot afford their home. So, before you begin looking for homes, get a pre-qualification letter to help set you up for success. You can apply for a pre-qualification letter in less than 15 minutes here.
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https://app.rosegatemortgage.com/app/signup/partner/X4TZ4RX5. Our pre-qualification letters take 24-hours or less so you can begin looking for your future home as soon as possible!
Write a Personal Letter
Another way to potentially sway sellers in your favor is through a personal letter. Not only does this show them that you’re serious about their home, but it will set you apart from your competition. Most sellers only see how many people put in a bid and for how much. If you write a letter, tell the seller why their home is perfect for you and your family. It doesn’t hurt to explain your situation. For example, if you’re moving across the country for a job but your family can’t join until you find a home - put that in your letter. It never hurts to pull on the sellers' heartstrings in hopes they pick you to purchase their home.
Lastly, everyone's least favorite way to win a bidding war - no negotiations. When the housing market is slow, it’s easy to negotiate a lower price. You want to stay far away from negotiations if you feel like this home will end in a bidding war. The seller will go with the person who will take the home “as is” over someone who wants them to lower the price to complete necessary renovations. Although this isn’t ideal for buyers, if you feel like this home is “the one,” make sure you have an adequate budget to complete the renovations you need before closing.
Ultimately, if you want to win the bidding wars of 2021, you must get pre-qualified, include a personal letter, and come to terms that there will most likely be no negotiations. The housing market is hot so you must be willing and able to compete for the home of your dreams.