It is every seller’s dream; receiving multiple offers which drive a competitive bidding war and higher sales price. While it is definitely good news, finding yourself on the sweet side of a bidding war as the seller can also get a little hairy if you aren’t sure how to handle it correctly. There are several different approaches that you can take to get to the closing table with a smile plastered on your face, and we are sharing them all with you in today’s post.
Potential Strategies To Consider
Before you assume that you know the best offer on the table, there are a few details that you should take into more careful consideration. Here are the three strategies for handling a bidding war that make the most sense:
- Go For The Highest Bidder
This is typically the first instinct of most sellers. However, the highest bid does not necessarily represent the best offer on the table. Beware that it is not uncommon for buyers to make an overly competitive offer and then find a way to back out down the road. Not to mention, if their offer is light years away from the value of the property, it stands a slim chance of getting funding from the bank.
- Ask Every Buyer To Present Their Best Offer
One way to help sort through those less serious buyers is to go back to all bidders and ask them to make their highest and best offer. This will encourage them to present their highest possible offer on the price, as well as, their most favorable conditions, such as waving an inspection period or offering a quick closing.
- Counter Your Favorite Offer & Put Off The Rest
In this situation, you have the opportunity to select the offer that is the most attractive to you and request that they sweeten the deal even more. Often this happens when you have a personal preference on the type of people that you want to sell to like a family, but still, want to retrieve a better offer. This gives you the opportunity to get the best possible offer from the buyer you prefer before countering the others.
Cash And Contingencies
Obviously, if you are like most people, cash is king. However, when you have several offers on the table, it is vital that you take the time to consider the contingencies of each seriously. Here are some of the most common and significant contingencies that have the potential to make or break your decision:
The Buyer’s Home Must Sell - This contingency requires the buyer’s home to sell before the deal can close. If you are in a rush to move, you will want to avoid accepting this type of offer.
Pre-Approval - Pre-approval is not the same as being pre-qualified! Beware of a buyer that tries to leverage their status of being pre-qualified because it does not mean that they will be able to actually get a loan. A pre-approval however, should be considered to be almost as good as a cash offer.
Appraisal Contingencies - Appraisal contingencies can become a hassle and a half. Again, if the appraisal comes in low, it is likely that the deal will collapse and you will be forced to put the property back on the market; probably at a lower price.
Closing Timeline - In some cases, a buyer will want to close as soon as two weeks, or as far out as a few months. Ultimately, you need to consider how this timeline will impact your life and expenses before accepting.
Want To Find Yourself In A Bidding War With Buyers?
At the end of the day, attracting a bidding war on your listing is an ideal situation. This puts you in the power position and raises your potential from walking away from the property in the best way possible.
However, getting a bidding war is easier said than done.
If you want to find yourself on the right side of a bidding war, you’re going to need a very experienced real estate broker that understands the ins and outs of correctly pricing and marketing the property. Check out this collection of brokers that are armed and ready to help you do just that.