Lola's Lake house had 52 showings and 14 offers! So how did we win a bidding war?
Well truth be told, we lost in the first round. We went to the open house, which had 19 (yes, 19 cars lined up and down the street). My oldest son said it would be a miracle if we got the property.
We prayed. A Lot.
Lake front property (especially in Michigan) is still a fierce battleground. With multiple buyers vying for the same property, it's essential to have a strategic approach to increase your chances of winning the bidding war. If you find yourself in such a situation, fear not! Here are some insights and tips to help you emerge victorious amidst the competition.
Be Prepared: Before entering a bidding war, ensure that your financials are in order. Get pre-approved for a mortgage and have a clear understanding of your budget. This will demonstrate to the seller that you are a serious and credible buyer.
Act Fast: In a competitive market, time is of the essence. Stay updated on new listings and be one of the first to view the property. This will allow you to submit an offer swiftly, giving you an advantage over slower buyers. We saw the property twice, the day before the open house and at the open house.
Make a Strong Offer: In a bidding war, it's crucial to put forth a compelling offer. Consider offering above the asking price to stand out among the crowd. Conduct thorough research on comparable sales in the area to ensure your offer aligns with the property's market value.
Waive Contingencies: Although it involves some risk, waiving contingencies like inspection or appraisal can make your offer more appealing to the seller. However, proceed with caution and consult with your real estate agent to assess the potential risks involved.
Personalize Your Offer: Adding a personal touch can help differentiate your offer from others. Write a heartfelt letter to the seller, explaining why their lakefront cottage holds a special place in your heart and how it would enhance your life. Emotional connections can sometimes sway a seller's decision.
Increase Your Earnest Money: By offering a higher earnest money deposit, you demonstrate your commitment to closing the deal. This can instill confidence in the seller and potentially give you an edge over other buyers.
Work with an Experienced Agent: Enlist the services of a seasoned real estate agent who has experience with bidding wars. They can provide valuable guidance, negotiate on your behalf, and help structure a competitive offer that aligns with your goals.
Remain Flexible: Flexibility is key when navigating a bidding war. Consider offering a flexible closing timeline or accommodating the seller's preferred terms to make your offer more attractive.
In the end we used an escalation clause, which is a contractual provision that allows a buyer to automatically increase their bid above competing offers up to a specified limit. It helps buyers stay competitive in a multiple-offer situation by ensuring they remain the highest bidder without continuously submitting revised offers. When triggered, the escalation clause typically stipulates the incremental amount by which the buyer's offer will surpass the competing bid, securing their position while providing transparency in the process.
Remember I said we didn't win the first round...we came in second. To an all cash buyer who NEVER EVEN SAW THE PROPERTY AND THEN DECIDED IT WAS TOO FAR FROM TOWN. So they backed out.
So even though we lost, I'll take it as a win. Because when they backed out — we were ready! We closed on Lola's Lake House 21 days later.
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