It’s no secret that the housing market has been booming. You may have heard about bidding wars on homes and been concerned about how difficult it would be to purchase your dream home.
This can be especially daunting for first-time homebuyers who are just learning to navigate the housing market. Understanding what exactly a bidding war is and how to make your offer stand out can make all the difference when it comes to making the dream of homeownership a reality.
What Exactly is a Bidding War?
Redfin considers a bidding war to be an offer on a home that has a least one competing bid on it. According to Redfin, on an unadjusted basis, 71.4% of offers on homes that were written by Redfin agents were a part of bidding wars in February 2022.
While that statistic is the highest on record for Redfin since 2020, the rate at which bidding wars are increasing is slowing. Rather than racing forward, that statistic is slowly ticking upward. The slowdown of that trajectory is in large part due to rising mortgage rates and inflation.
How to Make Your Offer Stand Out
In a competitive housing market, it’s important to make sure that your offer stands out. Here are five tips to help you snag the home of your dreams!
1. Show the Seller You’re Serious About Buying the Home
One great way to show you’re committed to purchasing the home is by having money to put towards a deposit. A deposit is good-faith money that is put down towards the purchase of a home and goes towards the down payment or purchase price. Deposits show sellers that you’re interested enough to put money on the line.
Also, make sure you have a letter of pre-approval and have your financial picture in order. This is imperative in any market and now even more crucial when competing with multiple buyers.
2. Be Flexible
Make sure your agent consults with the seller’s agent and knows their preferred closing date. How can you stand out from other buyers by being more flexible with this date? If the seller needs 30 days occupancy after closing, could you offer to let them to stay in the home for those 30 days rent free? Do what you can to accommodate them within reason.
3. Add a Personal Touch to Your Offer
Consider writing a letter to the seller about how much the home means to you and your family. Selling a home can be hard when there are memories attached to it. Knowing that the buyer will love the home as much as they did and build upon those memories can give the seller peace of mind.
4. Explore Different Property Types
When shopping for homes it’s important to be open-minded. Some property types are more likely to be a part of a bidding war than others. According to Redfin, the most competitive property type in February 2022 was townhouses. Consider including single-family homes or condos in your search to round out your options.
Expand Your Search to Include More Areas
Think about expanding your search to include different zip codes where the market isn’t as competitive. Some areas are even eligible for special mortgage products like the MSHDA MI 10k DPA Loan, which offers up to 10k in down payment assistance.
Contact Oakland County Home Lender, Julie Krumholz
Navigating the housing market doesn’t need to be stressful. Do you have questions about the real estate market or looking to get pre-approved?
Julie Krumholz has been helping Michigan homebuyers for over 35 years and has several loan programs available for various incomes and financial situations. If you are looking for a home lender in Oakland County or anywhere throughout Michigan, call Julie from Superior National Bank today at: 586-382-5482 and let her help you through the loan process and answer any questions you may have.
