How to Win a Bidding War in Auburn, Ca – Part 1
Auburn, CA, is one of the hottest real estate markets in the country right now. In addition to its moderate weather, Auburn is known for its outdoor recreation, festivals, and community events coupled with excellent schools and friendly neighborhoods, which has created a huge influx of buyers looking to purchase homes in Auburn. For sellers, this is excellent news but can be, and is, frustrating for buyers quickly outbid by better offers. How does someone win a bidding war in Auburn, Ca real estate? Here are a few tips that can help get your offer noticed by sellers.
5 Tips to Win a Bidding War in Auburn, CA
1. Get Pre-Approved for a Home Loan
I’m assuming that you’ve already been pre-approved for a mortgage if you’re making an offer but if not, being pre-approved by a lender is vital in today’s fast-paced market. You’ll need proof that you have the financing necessary to buy a home so sellers know you’re a serious buyer. At a minimum, you’ll need a letter from a lender and proof of funds to close escrow that reflects the financial details in your offer. Your offer won’t be considered serious in the current market without this.
2. Include an “Escalation Clause”
With an escalation clause, you increase your offer by a specific dollar amount over competing offers. If a property is for sale at $500k, you agree to pay $2,000 over other offers up to $515k with verification if $515K is your limit. Verification is proof of the financial details of the highest offer.
Over the last year, I’ve reviewed roughly 150 or more offers. Only one had an escalation clause, and that offer won the home he was offering on.
With an escalation clause, you know you’re doing the best you can do to win the home. If you don’t win, you’ll see what you need to do to win the next one.
The escalation clause won’t always win you the home, but it sure helps!
3. Include a Healthy Deposit
A healthy earnest money deposit shows that you’re serious about buying the home. An earnest money deposit is needed with every offer for real estate and is usually 1% to 5% of the purchase price. You get it back (applied to closing cost or downpayment) unless you cancel the agreement after releasing all sale contingencies. A larger deposit looks good to a seller.
This is the end of Part 1 of our two part series on “How to Win a Bidding War in Auburn, Ca”. Part 2 will be published next week. Stay tuned!
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