Look, if you’re buying your first home, you might want to consider finding some cheap property and learning how to “pilot” the thing first. However, not everybody has that luxury, and sometimes you’ve got to hope your aim is true with the one-shot you have available. Here’s the thing: even if you’ve got everything else arranged, what if you get in a bidding war?
What if some other buyer sees the same house you do, likes what they see, and wants to snatch it out from under you? What’s your move? Well, you want to go into the home-buying process with this in mind. The following are a few tactics a first-time homebuyer can use to win a bidding war with another home buyer.
1. Get Pre-Approved And Have The Paperwork Ready
First, show the seller that you can “ante up”, as the saying goes. Get pre-approved, have proof of this pre-approval with you as you go to purchase the property. If the seller shows a better offer from another buyer, you can ask whether or not they’re approved. If they’re not, you’ve got an advantage. It’s a slight one, but it’s there all the same.
If you can’t get pre-approved, then you’ll want to regroup before you return to the seller with a serious intent to purchase. Get a cosigner on a loan or something like that, and use that sort of paperwork as your approval. Different situations have different variables, but there’s always the potential to see your sought outcome.
2. Can You Pay In Cash? If Not, Up Your Offering Price
If you can pay in cash, do so; that will often decide a seller on the spot. In a radius of about 120 miles surrounding Dallas / Fort Worth, there are some very affordable units—some in the $50k range. You have to live in Texas, and such properties have their issues, but they’re in a range where some first-time homebuyers may be able to pay for the home outright.
If you can do that, you’ll win just about any bidding war you’re in—unless the other guy can pay outright as well. But most first-time homebuyers won’t be in a position to pay in cash. If you can’t do that, then offer more on the property. Keep in mind, you only want to do that if you’re so interested in this property that you’re willing to be in debt a little while longer.
3. How Much Can You Put Down? Expand That
The larger a downpayment on the property in question, the higher the likelihood you’ll win the bid. Even if those with whom you’re competing offer more, a downpayment is cash-in-hand. Meanwhile, the future isn’t something anyone can rely on 100%. Many people have lived long enough to know the wisdom of a “sure thing” when you have it.
4. Find Sellers Who Are Also New To The Market
There’s a lot of complication even in listing a home. Here’s a fantastic article from ISoldMyHouse.com on how to list your house for sale in a way that covers all your bases, and lets you know what differing listing avenues can do for you.
First-time home buyers and first-time home listers are in a very similar situation; as such, if you can find a first-time seller, you may be able to more effectively win a given bid.
5. Be Personal With The Seller
If you’re approaching the purchase of a home-like someone buying a used car, that’s going to work against you. You’re not buying some cheap hotrod, you’re buying a home that was lived in for a chunk of the seller’s life.
They’ve got an investment in that property that’s a lot deeper, emotionally, than that which comes with a car. Lean into that, and sentiment toward you from the buyer may win you the bidding war.
Getting The House You Want The First Time Out
First-time sellers are likely going to make mistakes in the home acquisition process, but the tips listed here should help you at the very least come out on top if a bidder interrupts the process.
Get pre-approved, pay in cash if you can; if you can’t, raise your offer. Beyond that, increasing your down payment, finding new sellers, and being personal are also good tips in winning the bid.