Make This Year Your First Time Ever, Where You Learn How to Negotiate: Tips on How To Successfully Win a Home Bidding War

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.


Can We Move to The Best Neighborhood We Want With a Jumbo ARM or Jumbo Home Mortgage?

Do you want to buy a home for $1 million or more? In many of our California neighborhoods, this is a starting price. A 30-year jumbo home mortgage or a jumbo ARM (adjustable rate mortgage) can help you finance a home purchase of more than $726,525 in many counties. In other counties with a majority of lower-priced homes, jumbo mortgages are any amount over $484,350. 

What is the difference between a jumbo loan and a conforming loan?

The term “conforming” refers to loan limits set by Fannie Mae and Freddie Mac, the two government-sponsored home loan mortgage purchasing organizations. Fannie and Freddie set limits on mortgages that they’ll purchase from lenders. This is the source of conforming loan limits: $484,350 in lower-priced counties, and $726,525 for higher-priced counties. 

When these two agencies buy a “conforming” mortgage, it reduces risk for the original lender. Qualifying for a conventional “conforming” mortgage can be easier because initial lenders know they can sell the mortgages to Fannie and/or Freddie. This isn’t the case for jumbo “non-conforming” mortgages. In this case, lenders may request more, or alternative documentation. 

What limits are there on jumbo home mortgages?

You can get jumbo mortgages for $1 million, $2 million, $5 million, and even $10 million. There is no technical limit on the amount of a jumbo home mortgage. You can also choose different loan repayment terms. While some jumbo mortgages are 30-year fixed interest rate mortgages, others can have 15-year terms. 

How can we qualify for a fixed rate jumbo mortgage or a jumbo ARM?

Different lenders will request different documentation to qualify you for the jumbo mortgage you need. You have options for using bank statements and alternative forms of income documentation. You may be able to use assets you have in reserve to qualify for a jumbo home loan. You may also use a combination of loan products to achieve your goal of owning the house you desire in the neighborhood you want to live in. Working with an experienced, qualified home mortgage broker will help you see all of your options in jumbo mortgages. You can decide whether you want a 30-year fixed rate jumbo home loan or a 5/1 jumbo ARM, or another mortgage product that meets your needs.