In the competitive realm of real estate, bidding wars have become a common occurrence. When multiple buyers express interest in a property, a bidding war ensues, driving up the price beyond the initial asking price. This expert review aims to shed light on how a real estate bidding war works in the United States. We will explore the process, strategies employed by buyers, and tips for navigating these intense negotiations.
Understanding the Process: A real estate bidding war typically commences when a desirable property attracts multiple interested buyers. To initiate the process, the seller sets an initial asking price, which serves as a starting point for potential offers. Interested buyers, accompanied by their respective real estate agents, submit offers to the seller, often in writing, indicating their proposed price and terms.
Competitive Strategies Employed by Buyers:
Offer a Strong Initial Bid: Buyers may choose to submit an aggressive initial offer to set the stage for the bidding war. This can help deter other potential buyers and demonstrate their serious intent. However, it is crucial to ensure the initial offer is still within a reasonable range.
Escalation Clause: Some buyers employ an escalation clause, which automatically increases their bid by a predetermined increment
How do bidding wars on a house work?
Is a bidding war good for the seller?
How much to offer in bidding war?
How do you handle a bidding war in real estate?
- Find out what the seller wants.
- Get a preapproval or precommitment for a mortgage.
- Be flexible with the timing.
- Offer a large earnest money deposit.
- Be a cash buyer.
- Offer concessions to the seller.
- Offer an appraisal gap guarantee.
- Write a 'love letter' to the seller.
When should you walk away from a bidding war?
Buyers find it impossible to buy a home without getting into a bidding war!— CW Phipps, Realtor, Exit 1 Stop Realty (@Jax_Realtor_CW) May 31, 2022
I have a workaround for those who are okay with buying new construction. I've been working with KB Homes; they have properties available for contract NOW! NO BIDDING WARS! #jacksonville #realestate pic.twitter.com/o4GJM5h7vB