- With how frenzied the real estate market is right now, a bidding war is almost a given.
- Realtors shared how to make an offer stand out, from waiving contingencies to offering to rent back.
- One realtor noted that writing a thoughtful letter can sway a seller in your favor.
- See more stories on Insider’s business page.
In California, one $400,000 house got 122 offers in a single weekend. In Pennsylvania, buyers are putting in upwards of 20 offers, only to be outbid every time. And in upstate New York, sellers are turning around on buyers at the last second and accepting a higher offer.
This is the ultra-competitive real estate market in the US right now.
Insider spoke with eight real estate agents from across the country who all described a hectic market where inventory is low and prices are soaring. In many markets, buyers are practically guaranteed to end up in an aggressive bidding war with other hopeful buyers.
Sean Waeiss, a broker and the owner of Wise Property Group in Austin, told Insider that demand is “through the roof.”
“We have 10 to 15 buyers for every seller that we have and … when we’re submitting offers, they’re getting 10, 12, 15, 18 offers on the house,” he said.
So now that a bidding war seems almost inevitable, what can a buyer do to stand out? Below, realtors share their best tips for homebuyers hoping to nab their dream home.
Make an aggressive offer
For anyone hoping to win a bidding war without coughing up more money, Waeiss had some hard truths to share: You have to be able to go over list price, and you have to have a lot of cash.
Waeiss said he’s telling clients to be “aggressive” with their price, but that he’s also cautioning them to be mindful of their cash reserves. In Austin, many buyers are waiving appraisal contingencies to make their offers more appealing, which means buyers have to cover the extra money if the house appraises for less than asking price.
“Buyers are having to bring a ton of cash to the table,” Waeiss said. “You’ve got to be able to have a strong down payment and you have to be able to overcome a low appraisal.”
No matter how aggressive a buyer’s offer, however, Waeiss said he won’t get clients involved in “out of control” bidding wars, because the likelihood of winning gets slimmer and slimmer.
“If I were to call that agent and they say, ‘We have 36 offers,’ I would call you back and say, ‘Let’s move on,'” he said.
Pay extra to have the home taken off the market
Sara Olvera, a real estate agent with Dream Town Realty in Chicago, told Insider that she’s found success with offering extra money to get a listing taken down quickly.
“I have a client right now that we were looking at three-bedroom townhomes, and those are hot because in the city, there’s not a lot of single-family homes under a million dollars,” she said. “We got into a bidding war and we paid $30,000 extra than asking price to just take it off.”
Olvera said the seller’s agent wanted to wait several more days in order to see the highest and best offers, but by paying extra to get it taken off the market, the buyer circumvented what could have been a more competitive bidding war.
“Sure enough, they took it off the market and we got it and we’re closing next week,” she said.
Pay attention to presentation
When it comes to actually crafting your offer, presentation matters, said Jared Goodloe, a realtor with Compass in Brooklyn.
Goodloe’s advice was literally to dot your I’s and cross your T’s – make sure words are correctly capitalized, and any scanned documents should look clean and professional.
And don’t, under any circumstances, hand-write your offer.
“If it’s smudgy … you’re not taking me serious,” he said. “Someone that’s wanting to take the time to type up an offer, they’re serious.”
Don’t make your offer contingent on selling your current home
In Raleigh, North Carolina, where Glen Clemmons is based, most sellers aren’t accepting offers that are contingent on the buyer selling their current house.
Clemmons, a broker and realtor for Costello Real Estate and Investments, told Insider that in situations where two offers are essentially apples-to-apples, sellers are almost always opting for the offer that’s not reliant on another sale, since there’s always a risk the buyer’s current home won’t sell.
“So unless you do a home equity line of credit to pull that equity out of your house that you need to sell and put it as a down payment for the next house, then you are not writing a contingent offer,” he said. “It’s not getting accepted.”
Offer to rent back the house
In some situations, giving the seller more time to stay in the home can make an offer more appealing, Nadine Pierre, a realtor with Allison James Estates & Homes in South Florida, told Insider.
“I’ve won offers only because my buyers were able to allow the seller to reside in the home for 30 days,” she said.
Of course, that’s easier for buyers who are looking for a second home or weren’t planning to move in right away to allow for renovations, but having some flexibility with the move date – and whether you even want to charge the seller rent to stay a little longer – can make your offer stand out.
“The sellers are selling very quickly, but then they need to find a place to live as well,” she said. “Sometimes, having that flexibility as a buyer where you’ll tell the seller, ‘Hey, I’ll purchase the property, but I’ll give you 60 days where you can stay there, rent-free, until you find your house,’ so that the seller on the opposite end doesn’t feel so rushed.”
Write a personalized letter
Writing a letter to the seller could give buyers a leg-up in a bidding war, said David McDonald, a real estate specialist with DMD Real Estate Group in Seattle.
While there’s no guarantee it’ll make a difference – “Some sellers will be like, ‘I don’t give a hoot about no letter, give me my money!'” McDonald said – you won’t know until you try.
McDonald advised keeping the letter light and brief, and using it as an opportunity to introduce yourself and to let the sellers know who you are, what you do, where you work, and if you have any kids. Some buyers choose to include a photo as well.
“Some people will say [the letter is] completely pointless. That’s a little bit more of a cynical perspective in my opinion,” he said. “No judgment, but that’s not an approach I like to consider, because you just don’t know who you’re working with on the other end.”