Expert Tips to Choose the Best Offer in a Bidding War

In modern real estate marketing, selling a home without setting up a bidding war is surprisingly tricky. Yes, you may be lucky and find an eager buyer quickly. But, in practice, the surest way to yield a decent sum for your home is through a bidding war. Unfortunately, a common mistake home sellers make represents opting for the most significant offer, regardless of the situation. Doing so can prolong the closing period and even ruin your sale. So, we will use this article to outline how you should choose the best offer in a bidding war.

Setting up a bidding war

You first need to set up a bidding war to have a decent number of offers. Seeing that a lot of first-time sellers aren't sure how to go about doing so, we will first outline some essential details to make use of.

Ask for a reasonable price

While this may seem as obvious, know that a lot of sellers make one of the two mistakes. They either lowball the cost of their home, hoping that that will draw in potential buyers. Or they overestimate their price, thinking that doing so will yield a better price.

Offering a fair price is the best way to set yourself up for being able to choose the best offer in a bidding war.

In practice, the best action is to ask for a property evaluation and use it as your asking price. Remember that no serious buyer will fall for a cheap tactic like lowballing or overestimating. They will do their due diligence and determine how much your home should cost. So, offer a reasonable price and start the bidding war from there.

Set a deadline

Setting a deadline for your bidding war achieves two things. First, it introduces the FOMO (Fear of Missing Out). If the buyers know they have a limited time to make their offer, they will be far more persistent. Know that a lot of buyers are considering various bidding offers. And that they might postpone making one for your home if they feel they have ample time to do so. For specifics on setting a deadline, we suggest you consult with your agent.

Choose the best offer in a bidding war

How can you choose the best offer in a bidding war once you set it up? As mentioned, the highest bid doesn't have to be the best. There are other factors you need to consider to get a good sales deal and see it through with relative ease.

Can buyers back up their offers?

Buyers cannot always back up their offers. Mind you. That doesn't have to be that the buyers knowingly mislead you. For instance, a buyer can make an offer that the lender is not willing to cover. All lenders consider the actual cost of the real estate. So, if the buyer, for some reason, went notably higher than the actual cost, the lender will be reluctant to cover them. If it so happens that the buyer cannot come up with further funds, the deal will fall through.

It is by no means uncommon for buyers to overestimate their financial capabilities.

Therefore, you must consider the entire financial situation of your buyer. You need to inquire about the following

• Whether they've gotten preapproved for a loan.
• What type of loan do they plan to get.
• Are they offering more earnest money or making a more significant down payment?
• Can they make an all-cash offer?

Knowing these aspects can help you outline which offers are worth considering.

Contingencies and concessions

Contingencies are the extra conditions the buyers might ask for along with their offer. For instance, a buyer may request that you perform certain repairs or renovations on your home before you sell it. Small things like removing old furniture are relatively easy to adhere to, especially if you have moving professionals by your side, as experts at US Moving Experts Chicago advise. But what if the buyer wants you to remove your pool or replace your roof?

Particular renovations can significantly impact how you view the bidding offer.

They might even ask that you leave your furniture or appliances (especially if they seem new). As you can imagine, these contingencies can determine whether one offer is better.

Closing timelines

If your living situation is resolved before selling your current home, the closing timelines shouldn't be much of a problem. Ideally, you will look for someone to close the deal immediately. But, some waiting time should be ok.

On the other hand, if you need to look for a home while selling one, you might find yourself in a tight spot. The last thing you want is to put all your belongings in a storage facility and live out of a hotel until you find a decent place to live. In this instance, the buyer can offer to let you stay in your home for an extra month or two after moving out. That will give you ample time to find a new home and adequately prepare for the big day, especially if you are moving this spring. Remember that the buyer can ask you to pay rent after becoming the defacto property owner.

Final thoughts

One of the best ways to choose the best offer in a bidding war is to have an experienced real estate agent by your side. They will not only aid you in filtering through various offers. But they will also help you with the negotiation process. Leading a bidding war does give sellers a certain feeling of power. After all, a lot of people are after something that you own. Unfortunately, this feeling can go into the seller's head and lead them to think that if they negotiate well enough, they can make a fortune. An experienced realtor will help you stay grounded and ensure you sell your home for a reasonable price in a reasonable timeframe.