How to Win a Bidding War in Auburn, Ca – Part 2
If you missed part 1 of this post, please click here. This is Part 2 of How to Win a Bidding War in Auburn, Ca.
4. Pay cash if possible
Since the downturn of 2008 through 2012, lending standards have changed so much that cash is no longer king. In the early 2000s, if you were a cash buyer, you could expect to get a home at a slight discount. That isn’t the case now as buyers are better qualified than those days due to stricter lending standards, and there aren’t “funny money, fog a mirror” loans out there.
However, suppose the cash offer is close to the highest offer. A seller may choose it over a financed offer depending on the terms because cash offers remove two parties in the transaction, the lender and their appraiser.
5. Remove Some or All Contingencies of Sale
I consider the removal of all contingencies in the offer to be risky and wouldn’t recommend a buyer do that; unfortunately, it may be necessary to win the home.
Warning: If you remove all sale contingencies with your offer and the seller accepts it, you’re telling the seller that your deposit is theirs if you cancel.
If you’re going to remove all contingencies upfront, make sure your deposit isn’t too high. If you offer a $5000 deposit with all contingencies removed, then find $30,000 or more in repairs during inspections and decide to cancel, you’ve cost yourself only $5000 rather than $30,000 for a home repair you don’t want. While losing $5000 isn’t a good feeling, it may be necessary.
Another option is to remove some but not all contingencies. If you’re getting the home below what you think it should appraise for, removing the appraisal contingency could be an option. If your loan is fully approved, you could remove the loan contingency. Both of these options leave the inspection contingency intact, which is important.
To make this approach better, limit the inspection time to 10 days or less. This approach looks better with a solid deposit and a larger than 20% down payment.
Final Thoughts
Many people don’t want to deal with a “bidding war.” Who can blame them? It’s a crazy process that leaves most buyers with a sour taste in their mouths. If you have an experienced agent working for you, it makes the process easier to digest.
With a little bit of preparation, planning, and the right real estate agent with you, you can put yourself in a position to win.
Whatever your real estate needs, Gold Rush Realty is here for you. We have the experience, dedication, and determination to help you find your dream home. We offer personalized service with a professional attitude to suit your every need. Please click here for our contact page, and we’ll get back to you promptly.
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