If you’ve put your home on the market and have received multiple offers, you’re probably thrilled that your home is in demand, but now you’re faced with a dilemma: how does a home bidding war work, and how do you choose the best offer when you have multiple counter offers? It can be tough to know what to do when selling your home results in a bidding war but don’t worry — with the right approach, you’ll find yourself in a uniquely advantageous position.
In this blog post, learn the process of selling your home and explore your options to help you make the best decision. From playing the house offer waiting game to negotiating the final price, this guide will help you learn what to expect when you find yourself in a bidding war.
WHAT IS A BIDDING WAR?
A bidding war refers to a situation in which two or more buyers compete against each other to purchase a home. Bidding wars often occur in high-demand markets with a limited number of available homes. Buyers submit attractive offers, hoping to eliminate the competition and win the house.
Bidding wars can benefit sellers by driving up the home’s final sale price. However, they can also be stressful and unpredictable. Therefore, if you know you are listing a desirable home in a hot market, it is best to prepare for a bidding war before listing your home.
WHAT CAUSES A BIDDING WAR?
While bidding wars are most common in seller’s markets, several factors can contribute to a bidding war:
- The property is attractively priced relative to similar properties on the market.
- The property is in high demand due to its location, size, condition, or other factors.
- There is a limited number of similar properties available on the market.
- The seller is motivated to sell and willing to entertain multiple offers.
WHAT TO DO DURING A BIDDING WAR
There are a few things you can do to maximize your chances of a bidding war working in your favor. For starters, be sure to have a clear idea of what your home is worth. Don’t get caught up in the frenzy of a bidding war and overprice your home; this will only turn potential buyers away. Instead, be realistic about your home’s value so that you can find the right buyer who is willing to pay a fair price.
Another tip is to be flexible with your closing date. If you are not rushing to move, consider offering the winning bidder an extended closing date to show that you are willing to work with the buyer and be flexible, which could make them more inclined to meet your asking price.
Lastly, don’t be afraid to walk away from a deal if it isn’t meeting your expectations. If you have gotten multiple bids, but none of them are close to your asking price, it may be best to just hold off on selling for now. There’s no shame in waiting for the right offer, so don’t sell yourself short just because you’re in a bidding war.
HOW TO CHOOSE THE BEST OFFER
Consult with your real estate agent — they will have experience dealing with bidding wars and will be able to help you pinpoint the most lucrative offer. Resist the temptation to accept the highest bid carte blanche — sometimes, the highest bidder is also the riskiest. It’s best to choose an offer that simultaneously meets your financial goals and has a reliable chance of closing.
You should heavily weigh the benefits of cash offers. Cash gives you a rare opportunity that can expedite the sale and allow you to walk away with more money — even if the initial bid is lower than others on the table.
Additionally, you can sidestep buyers who may be bidding beyond their means by exclusively considering buyers with pre-approval (if your asking price exceeds the appraisal, buyers who only have pre-qualification will have a more challenging time securing adequate financing). You don’t want to miss an opportunity to sell your home for a premium by spending time on offers that may ultimately fall through.
Consider factors beyond price when making your decision. For example, if a buyer seems more committed and easier to work with than others, they may ultimately be the better choice.
Some buyers might be willing to offer more favorable terms, such as a shorter escrow period or a higher deposit. These details can determine the final amount you net when the transaction closes, and all fees are paid, so take the time to weigh all options and possible outcomes.
Trust your instincts. Your realtor can help you navigate the process, but in the end, you should go with the offer that feels right to you.
MAKE THE BIDDING WAR WORK FOR YOU
A bidding war is a good indication that your home is in high demand. This can lead to a higher final selling price than you would have gotten if you had accepted the first offer. A bidding war can create a sense of urgency for other buyers who are interested in the property, which may ultimately give you more negotiating power when it comes to inspections and repairs.
A bidding war presents an opportunity to net a more significant profit on your home sale, but handling negotiations can be exhausting. You need an experienced real estate professional to handle the battles on your behalf, ensuring the war ends in your favor.
Brandon Carney of Carney Realty Group provides a comprehensive menu of real estate services. With decades of industry experience, he has the knowledge and local connections needed to help you navigate complex real estate scenarios like bidding wars. His team of experienced agents knows the Virginia Beach real estate market inside and out and will tenaciously represent you to ensure you get the most lucrative deal.
Carney Realty Group has handled countless home sales and serves as a dedicated resource to lean on during challenging real estate transactions. We provide support through each step of the process, ensuring you are confident with your final decision. If you need a trusted partner to help you sell your home and navigate any complexities, contact us, and let’s get started today!
