In today’s real estate market, the most desirable homes can often sell for higher than their original asking price. How does this happen? Well, if you’re looking at elite properties, you may already know: more than one buyer who can afford the home competes to get the desirable address, luxurious estate, and premier neighborhood. Buyers engage in a bidding war. But does the highest bidder always win? Not always. There’s more than money involved in competing offers on real estate, especially with premium properties.
Does the highest offer always win the bidding war?
Selling a home is a financial decision, but it’s also a personal one. Owners are understandably attached to their home, and they naturally have feelings of wanting the next family to move in to be as comfortable and happy as they were. This is why some real estate professionals counsel that it’s smart to write a letter of introduction or actually meet the owners if it’s possible and advisable.
Here are some other “must-haves” if you know you’ll be in a competitive situation when making an offer on a house:
- Get pre-approved for financing
- Increase your earnest deposit
- Be flexible on conditions (repairs, escrow period, etc)
- Prepare multiple contracts – anticipate potential increases
- Negotiate flexibly
Most of all, you should be prepared mentally when making an offer on a home. You may be one of several qualified buyers. In any negotiation, you should always be aware of the maximum amount you can reasonably afford. Don’t go beyond your comfort zone or realistic financial expectations just to “win a war” against another buyer. No matter how much you may love the home you’re bidding on, there will always be another opportunity.
The ability to win a bidding war on a desirable home is one of the most important reasons you will want to work with an experienced home sales, loan, and real estate professional. California Platinum Realty and California Platinum Loans have the experience necessary to guide you through even the most complex real estate negotiations.