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3 ways homebuyers can win bidding wars

You need more than a cover letter

A recent HousingWire article generated a lot of buzz on how homebuyers could winning bidding wars.

The biggest takeaway from the comments: everyone and everywhere is different.

Furthermore, some of the critics of the piece argued the tactics included in the article to win property bidding wars did not go far enough. Others, looking to add constructive comments wrote in letters to the editor.

One in particular, caught our attention with 3 ways to win a bidding war.

While there is not a perfect formula for how to win a bidding war, which is more likely than not to happen in today’s market, there are homebuyers and their Real Estate Agents can use to try and secure a home.

Additionally, the piece linked to another insightful list from Minnesota Realtor Craig Kamman that has tips on how to help win a bidding war.

But even with this variety of tips, there are still other ways to help strategically win a bidding war for any given residental property.

Sergio Silva, a real estate agent with Keller Williams Realty in Carmel, California, sent over a list of three things he does to get his client's offers accepted above the competition.

Let us know what you think of his advice in the comments section below!

Here are 3 ways for homeowners to win a bidding war:

1. Realistic offer

First and foremost the offer has to be realistic. If you are in a bidding war your clients must know that they must go above asking. The number of offers will tell you just how much interest there is. Buyers must know that a comparable is a past measurement. They are not overpaying for a house but catching it on its way up. Imagine hitting a moving target. You never shoot where it’s at but you aim for where it’s going to be.

2. Offer to make up appraisal difference

Appraisals are all over the place. They go to a call station and sometimes the appraiser is a local appraiser and other times they are from out of town. Just because you offer $25,000 over, doesn’t mean that your offer will get accepted. To insure that your offer does get accepted, put a clause in the contract that states, "If property does not appraise, the buyer is willing to cover the difference up to $5,000 (for example)". This gives some peace of mind to the seller that they will be still coming out on top if the home does not meet appraisal expectations.

3. Letter to the seller

Letter to the seller does help but it has to be done a certain way. The point of the letter to the seller is to make your clients come alive. You want your buyers to be more than just a number on a paper. When touring a property, find certain things that your buyer and the seller have common, such as water skiing, camping, local sports teams etc. When writing the letter to the seller, include that in there. People do business with other people that are just like them so its important to build that rapport with the seller. Another important thing to do is to talk about just how amazing their home is. Never ever bad mouth or try to negotiate in a letter to the seller. The main point in the letter to the seller is to make your buyers come alive, tell the seller how beautiful their home is and how you are putting your best foot forward to buy the home.

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