Real estate bidding wars are less common than they used to be, but they can still happen. This is especially true in markets homebuyers are desperate to move into, with a bidding war driving up the price of the property much higher than was expected when the first bids were made.
The most effective way to close a deal in your favor when it comes to real estate is by making an all-cash offer. This makes sense, if you can afford it, because it’s a much cleaner process with far fewer hoops to jump through for both the buyer and seller, and it was shown in a study by Redfin that paying all-cash more than triples your chances of being successful. If your battle is starting to look competitive, see if this is an offer you are able to make to seal your new home.
Interestingly, the second most successful strategy as checked by Redfin is a much more personal one that has nothing to do with money changing hands at all. That strategy is to simply write a personal letter to the seller. This is far less effective than the no financing deal, but people in this day and age don’t often feel a connection between buyer and seller. If someone has lived in a house for 20 years or so, they want to know that the person buying the property has some level of respect for it. That is why a well written and well thought out letter can – in some circumstances – tip the scales in your favor when it comes to a real estate purchase. Showing that you care about a house and the person selling it can be a huge deal closer, especially with older home sellers.
The other three metrics tracked by Redfin were all less effective. Waiving a financial contingency – basically protecting the buyer from liability in the event of a sale falling through after a failure to secure a loan – had some traction, but it was a much more effective bidding war strategy a few years ago. This strategy, however, was more effective than both waiving the inspection contingency and conducting a pre-inspection of the property, neither of which had any impact at all on bidding wars won.
What this tells us is that cash is still king and that the personal touch of a letter still holds merit in the world today. It is fascinating that something as simple as a personal note from buyer to seller can still help with real estate buying. Perhaps that is an example we should take into all aspects of our everyday life.
Article by Vital Guidance