There is a good chance that you won’t be the only one to notice when an attractive home comes to market. And, if you do find that you are in competition against others for the home of your dreams, it’s important for you to be prepared and ensure that you can win in a competitive offer situation. For tips on winning in a competitive offer situation, as well as other tips on buying real estate, keep reading below and take the necessary steps during the house buying process.

Be First

This is something your real estate agent will also tell you: be first! If you find the perfect house don’t be afraid to put in an offer as soon as you can as it’s more likely that your offer will be accepted. This will minimize the chances of the house going into competition and could also save you some money as you won’t be competing for the house.

Another important factor is to have your finances in order. Make sure you are pre-approved and you know how much house you can afford as your offer will hold much more weight if financing doesn’t stand in the way. It will show the seller that you are serious about buying the house right away, which will give them more confidence in accepting your offer, and moving forward with the sale. .

Be Prepared to Outbid Others

If you are in house buying competition, it is likely that you will have to pay at least list price or slightly higher than list price to win the bidding war for the house. Therefore, it’s important for you to determine what you are willing to pay for the house before you get started. Talk to your real estate agent about your budget, your pre-approvals, and what you are willing to spend and stick to it. Sometimes, in some areas, houses might sell for tens-of-thousands more than list price because there are a number of buyers interested: your best bet is to avoid these situations, but if unavoidable, pre-determining with your real estate agent what you might be willing to spend could be your best strategy.

Use Your Realtor to Your Advantage

Your Realtor (real estate agent) should be your biggest advocate during your house search. The real estate agent you decide to work with should be a person you trust, and someone who you are confident will work in your best interest. They should be excellent negotiators and it’s important for them to really understand your local market and the houses that you are looking at/for. They should also be realistic: a real estate agent should let you know what a reasonable offer is for the particular house you are looking to buy, and what you might expect as a counter-offer from the seller. It’s also their job to ensure that the offer you are willing to allow them to present is reasonable as you never want to offend the seller of the house. Bottom line is, be up front with your real estate agent, and if you take the time to select the right agent, you should be confident in sharing information with them that they can then use to ensure you end up buying the house you really want.

Waive Conditions

If you are serious about a house, being in a situation to waive conditions or even be more lenient with them could help secure the deal. For example, a lot of times the conditions on buying a house might be closing date, house inspection or even financing. By having the ability to waive these conditions, a seller might be more inclined to accept your offer versus a competitive offer. This is something you should talk to your real estate agent about and it’s important for them to get a feel for what is important to the seller. By having this knowledge up front, or even during the negotiating process, it might just help you win over the competitive house buyer.

Pay for the House with Cash (or at least be willing to give a hefty down payment)

Paying for a house in cash may not be realistic for most house buyers, but if you can pay for the house in cash, definitely do so. Cash is king and it would be very difficult for a seller to turn it down. If you buy with cash, you can skip an appraisal that lenders typically require and speed up the entire process.

But, for most, buying with cash may not be an option; which leaves the down payment as part of your negotiation tools. This is something that your real estate agent can really help with. Some areas might be okay with a $5000 down payment, where other areas might want a percentage of property (say 5-10%). This is insight that your real estate agent can provide and it’s important to understand this well in advance of deciding which house you might want to buy.

Avoid the Competition When Possible

For a seller, a bidding war, or having a house go into a competitive offer situation can really benefit the bottom line sale price. But, for buyers, it might land them in a situation where the house being purchased is bought at a higher price, even above list price, or outside of a comfortable price range. By being prepared, having all the pre-approvals in place, and also understanding the local real estate market by working with a real estate you trust, you can either avoid house buying competition all together, or at least be prepared to win the house in a competitive situation.

This article was Dixie Somers on behalf of Henry Walker Homes who help buyers with Longmont houses and specialize in home financing, floor plans, and home design.

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