One of the issues that you might find with the house you’re trying to buy is that other people want to buy it, as well. That can result in a bidding war between you and other buyers. Don’t underestimate the way a bidding war can drive up the price of the house you want, but it’s not necessarily a reason to back away. There are plenty of signs that can help you decide if you want to stay in a bidding war, and if you pay close attention to those signs you’ll do the right thing. It’s important that you don’t get caught up in the bidding and make an offer that’s higher than what you can really afford, though. By tempering your love for the house with some careful thought, you’ll be ready to bid fairly and you’ll have a good chance of winning, too.
1). Is the house everything you want?
Don’t stay in a bidding war on a house you don’t really love. There’s no reason to keep pushing to get a home when another home would be just fine, too. If you’re really committed to the house, though, and it offers everything you want and could see yourself needing for as long as you live there, you should stay in the bidding war. That’s also true of houses that need work, if you can see what you would do to make the house into what you really want it to be. If it feels like your home, you may want to continue trying to get it, rather than giving in to another buyer.
2). Does the location work for you for the long term?
The one thing you can’t change about the house is the location, and if the home’s location really is perfect you have a good reason to keep yourself in the bidding war. Even if you find another house you’re really happy with, you can’t get that same location. Especially in neighborhoods where houses are popular and quick to sell, staying in a bidding war may be the only way you’ll ever get into that particular area.
3). Was the original asking price lower than what you can afford?
When you get involved in a bidding war it can feel stressful. But it doesn’t have to be that way. Consider how much the seller is asking for the house, and whether you can pay more for a home than that. Find out what your max budget really is, and you may be able to stay in the bidding war for the house you really want. As long as you still want to buy the house and the bidding hasn’t gone above what you can and want to pay, there’s no reason not to stay in the bidding war and hope for the best.
4). What does the appraised value look like?
While you can’t just have an appraisal done on someone else’s house, you can talk to your real estate agent and others who are in the know to get a good idea of what the house is truly worth. The appraised value is important when you’re financing, and if the house is likely to be valued at or above your bid, you don’t need to drop out of the bidding war. You can keep moving forward, and hoping that your bid will be the winning one.
5). What is happening to house values in the area?
If home values in the area are staring to go up or are projected to rise sharply before too much longer, now is the time to buy in that location. If you stay in the bidding war you may be able to get a house for a price that just wouldn’t be possible a few months later. That can mean more equity for you and a great financial position, even if you have to pay more than you originally anticipated for the house itself.
6). Were you prepared for the possibility?
A bidding war isn’t that common when you’re trying to buy a house, but it can and does happen at times. If you’re prepared for the chance that it could happen and you know what you want to do in that circumstance, you’ll be better off and potentially have less stress throughout the process. You can also stay in a bidding war more easily if you have some plans in place before it happens. Then you can make decisions faster, and that could help you be the one to win the war and buy the home.
7). Have other potential buyers dropped out?
If you know what to look for in any bidding war, you’ll be more likely to get the house you want. One of the things to look for is whether other bidders have started to drop out. That lets you know that you’re getting closer to a potential victory, because you have less competition than you did before. While it won’t guarantee that you’ll win the bidding war and get to buy the house, it can help give you a better chance at seeing success. When it’s a house you really want, the goal is simply to have the highest bid or the one with the most favorable terms, and wait out other bidders. Then you can be the one moving into that beautiful new house.
2 Point Highlight
Don’t underestimate the way a bidding war can drive up the price of the house you want, but it’s not necessarily a reason to back away.
If you know what to look for in any bidding war, you’ll be more likely to get the house you want.
