How to Win a Bidding War on a House for Sale
With all that’s going on in this hot Portland real estate market, including bidding wars, we want to give you some tips on how to navigate it all.
But first, let’s take a look at the bidding war claims and see what’s really going on.
Are Bidding Wars Really Happening in Portland?
Due to the ongoing supply-demand imbalance, potential home buyers in Portland have had to work hard to get the homes they want.
Part of the reason for this is that the pandemic has allowed more and more people to work from home. This has resulted in people with more affluence moving to Portland—from California, for instance—which has often meant buyers receiving offers far above their asking price. Not such a bad deal if you’re the seller, but what this does, in turn, is hike up home prices and create bidding wars between buyers.
There was also a rush in January 2022 with people trying to get ahead of the impending mortgage rates, which ultimately came in March. Portland came in twelfth in a list of fifteen cities with bidding wars, according to Redfin analysis.
There are claims that some homes in Portland have recently sold for between 30%-50% more than the asking price! Clearly, this is complicating the real estate landscape for many. But bidding wars are not new to Portland, and if they continue, we’re likely going to see people heading elsewhere in search of less buying competition.
Before you decide to flee the city, though, here are some things to consider if you find yourself caught in a war to win a bid on the home you love.
How do Bidding Wars in Portland Work, and Should I get Involved in One?
While some of these extreme bidding war cases have happened in Portland, it isn’t the norm. It’s good to know, though, how they come about so you can be armed and ready should you find yourself in the middle of one.
Usually, when a seller receives an offer, they will wait for a few days to accept. This creates an “offer window.” They will collect as many offers as they can within this window, then pick the one they like best at a pre-determined time. It is best practice for the seller’s agent to notify the buyer’s agent about how many offers have been collected. This gives buyers a chance to increase their bid before the seller makes a final decision. While this is generally a blind bidding process, the more offers there are, the higher buyers will likely have to go if they want to win the bidding war.
This is why having a good buyer’s agent is essential. We can’t predict the future, but after performing thousands of transactions in the Portland market, we have a pretty clear idea of what will likely beat the next offer. We’ll also tell you when we think it’s time to walk away. We’d rather see you pass on a home and keep looking for something in your price range, than let a competitive streak make you do something you’ll regret down the road!
There’s no reason for you to pay 50% over the asking price, unless, of course, you really want to.
How to Buy a Home in Portland’s Hot Seller’s Market
In a past article, we offered five steps to buy a home in a hot market like Portland’s. Here’s an at-a-glance view of what we recommend.
- Connect with an agent who can see “coming soon” listings.
- Use a smart real estate engine, like PortlandHomesForSale.com.
- Stay on top of inventory as it ages.
- Wait for more inventory.
- Work with an agent who is a top negotiator.
Read the full article here.
Get Specific When You Make an Offer
Before you put it in writing, make sure you’re clear about what kind of offer the seller is looking for. Don’t be afraid to ask questions. This is when having a trusted, experienced real estate agent comes in handy. They can not only help you know what to ask, but they can also do the asking for you.
When you finally discover your dream home and are ready to write an official offer, be sure to check these boxes.
- Name all interested parties and the property—This would be you, the sellers, and the property address.
- Clearly describe the money aspect—This goes beyond the price to also include how the money will change hands (cash, mortgage, or a combination), how much in earnest money, and who will pay for closing costs.
- Name a closing date—This is the day you sign all the papers and get the keys.
- Name contingencies—This protects you, the buyer, in case something goes awry during the process. Contingencies could include inspection, appraisal, and financing.
- Inclusions—This is where you get to list everything you see in the home that you would like to have the sellers leave behind (that isn’t already fixed to the home or land). This could be free standing appliances or furnishings.
Read more about how to win a home offer.
What to do When a Buyer Turns Your Offer Into a Negotiation
It isn’t uncommon for a seller to make a counter offer on a buyer’s initial offer. After all, everyone involved in the sale of a home is wanting the best possible outcome for themselves. Here are a few tips if this should happen to you.
- Don’t panic
- Be timely
- Counter with confidence
- Don’t let a competitive streak take over
- Know the seller’s sweet spots
Read more about how to negotiate a counter offer.
Let us Help You Navigate a Real Estate Bidding War
We understand how frustrating it can be to search and search, then make an offer on a home, only to have someone out bid you. We’ve been doing this for a long time—almost 20 years—and during that time, we’ve negotiated some complicated deals. We’d love to help you sort through it all so you can get the home you have your heart set on! Give our top 1% seller’s agents or our top 1% buyer’s agents a call today or chat with the bot on our site.May 6, 2022