How to help buyers win bidding wars on a home

If you're buying a home in today's market, here are six tips to help you through the bidding process.

Research the housing market in the area. Have your finances in order before you start looking. Know your price range. Have a pre-approval letter from a lender. Make sure your offer is competitive. Be prepared to act quickly. It’s what I would do if I were in your shoes buying a home.

Make sure you get pre-approved before you start home shopping

Here’s an analogy that I often share with clients. If you break your arm, a doctor will need to assess your injury; they can’t guess. The same concept applies when you’re shopping for a home.

It is simpler to get pre-approved for a home rather than guessing which ones you would qualify for. This will help to narrow down your search. You are more likely to win a bidding war if you are pre-approved. This gives you an advantage over buyers who are not pre-approved.

Sellers may give buyers who have a fully underwritten credit pre-approval preference

This means that your credit history, income, and assets* have been verified. The extensive pre-approval process can help your offer stand out. It can even win over a seller when there is an all-cash offer.

Ask yourself if the contingency is absolutely needed when in a bidding war

Contingencies give you a security blanket. This ensures certain conditions are met so you can close on your property.

However, contingencies can put you at a disadvantage in bidding wars. For example, you may feel the need to inspect the chimney. You can use this as a contingency plan. The chimney may have an issue. This won't cost you anything. You have the right to cancel the agreement.

Another buyer's offer without a contingency usually carries more weight. It is important to prioritize before making an offer.

Be flexible on your closing dates

Be open-minded when it comes to closing. This flexibility could help you win the house. Other buyers may be willing to be lenient about their closing dates. Unless you absolutely do not have any flexibility, you could use that as a negotiating tool in a bidding war.

Make sure you work with a loan officer who has local knowledge and experience

There’s nothing worse when real estate agents work with loan officers who don’t have local experience. Co-ops are very specific to New York City, so local experience is important. They may have creative financing options that other lenders don’t have to give you that advantage in a bidding war.

Weigh the pros and cons of raising your offer

Raise your offer. Speak to your loan officer. Ensure that your monthly mortgage payment is still comfortable.

Acknowledging that you can't pay your bills and mortgage can be difficult. Don't be afraid to walk away in this situation. Bidding wars are stressful, and sometimes you just must be strong enough to walk away.

How to get help with a home bidding war

Don’t let bidding war stories alter your homebuying mindset. They’re a function of the homebuying process and should be expected in most situations. The short answer is, I’m here to guide you and answer your questions. If you need help please call our team at (646) 584-8009 or contact us via email [email protected].

PowerBid Approval (the “Approval”) is contingent upon receipt of executed sales contract, an acceptable appraisal supporting value, valid hazard insurance policy, and a re-review of your financial condition. OriginPoint reserves the right to revoke this Approval at any time if there is a change in your financial condition or credit history which would impair your ability to repay this obligation and/or if any information contained your application is untrue, incomplete or inaccurate. Receipt of an application does not represent an approval for financing or interest rate guarantee. Not all applicants will be approved for financing. Restrictions may apply, contact OriginPoint for current rates and for more information.

Equal Housing Lender, Brian Scott Cohen NMLS ID: 410025; OriginPoint LLC fka Guaranteed Rate Affinity, LLC (“OriginPoint”) NMLS 1598647; For licensing information visit nmlsconsumeraccess.org. Operating in the state of New York as OriginPoint LLC fka GR Affinity, LLC. Operating in the state of California as OriginPoint Lending LLC fka Guaranteed Rate Affinity, LLC.

Information provided is for educational purposes only. It should not be construed as financial or legal advice or instruction. OriginPoint does not guarantee or assume liability for the accuracy, completeness or timeliness of the information. You should conduct additional research before making any mortgage related decisions.