When you’ve set your heart on a property, the last thing you want to do is get into a bidding war with another prospective buyer.
The uncertainty and potential stress on your finances can become all-consuming and, for many buyers, this erodes the initial delight of finding their dream home.
As an experienced local agent, I’ve seen many situations where competing buyers pull out of the checkbook in the belief that money talks.
But that can be an expensive strategy, and you might live to regret it when the time comes to start repaying the loan.
When I’m representing a buyer, I stress the need for a cool head. If the emotion of competition and desire to win takes hold, I’ll always tell my client that there’ll always be other properties to fall in love with and to buy.
You don’t want to get swept up in the moment if it’s going to put you under financial stress. There are several strategies we can deploy in these situations to avoid a money fight and still seal the deal. These include:
- Find the motivation to sell – Why does the seller want to leave such a fabulous home? Sometimes, they are selling under the pressure of a deadline because they have a new job. Or the sale is related to a deceased estate or a divorce, in which case everyone wants to see the back of the property as quickly as possible. Find out the seller’s drop-dead date, and promise that you will have everything wrapped up by then. This will be greeted with relief and put you in a strong position with the seller.
- Compress the inspection period – Offers are always made on the contingency that the home passes building and pest inspections. It takes time to organize these, so give your word that you’ll arrange them as quickly as possible. Even if the seller isn’t on a deadline to move, they’ll be grateful that they’re not hanging around for weeks while contractors organize themselves.
- Make a personal gesture – I’ve seen buyers pick up on the personal interests of the seller when attending a showing of the home. If they’re a sports fan, you might send tickets to their team’s next game along with your bid. You’re demonstrating your genuine interest in them and their home. It’s a common sales technique in industry, and it can work when buying a property, too.
- Don’t wait for loan approval – Most offers are based on the condition that mortgage approval is forthcoming. This can take a week or more to come through, and during that period, the seller is on edge. If you’re confident of your fiscal position and the value of the home, you can drop this contingency. This should put you ahead of the pack.
- Write a letter – This should be a very personal approach. Homes are often full of memories, and sellers can be influenced positively if they believe the property is going to a person or family who’ll emotionally value the home as much as they do.
In the current market, with many property prices rising due to buyer confidence, you must avoid an emotional negotiation and stay within your budget. If I can help you buy your next property, or sell your current home, please do not hesitate to call.