Handling A Bidding War As A Seller
There is nothing more exciting than realizing that the house you have put on the market has elicited a bidding war. Unfortunately, that excitement won't amount to much if you don't know how to handle the bids properly. Keep these tips in mind when selling a house in a bidding war:
Mind the Contingencies
Most home buyers include contingencies on their purchase offers, and some of these contingencies may not be good from your point of view. For example, a buyer may make their bid contingent on getting their spouse's approval. Imagine if this is the case and the spouse is still on a business trip; what if the spouse comes for the viewing a few weeks later and rubbishes the deal? Another example is a buyer who makes their offer contingent on you making an expensive repair that will eat into your sales proceeds. In short, look for contingencies that won't be difficult to fulfill.
Don't Accept the Highest Bid Automatically
One of the easiest mistakes to make is to take the highest bid without considering any other factors. Ideally, you should consider each bid as a package and analyze them carefully. It's only after such an analysis that you will be able to make an informed decision. For example, you may automatically accept the highest bid and go through the sale process only to have it fall through at the last minute because the buyer does not qualify for the mortgage.
Look For a Motivated Buyer
Not everybody who says they are looking for a house is looking for one to buy right now. Some people like to test the waters before they are ready to buy by viewing houses and submitting bids. Such jokers can waste your time if you don't identify them early enough and stop dealing with them. Therefore, look for motivated buyers – those who are actually in the market to buy a house now. Here are some of the signs of a motivated buyer:
- They have preapproved mortgages
- They have reasonable contingencies
- They want to close fast
- They take their time during viewing
Don't Be Too Greedy
Lastly, you shouldn't be too greedy even if your property is attracting competing bids. Being too greedy, for example, by adjusting the price upwards by an unreasonable margin, can even backfire on you. There have been cases where greedy sellers have ended up scaring away potential buyers with their greedy antics. If that happens to you, you may be forced to accept a lower offer than the ones your property attracted in the first place.
This is one of the cases where you need an experienced real estate agent's help to sell a property. Such an agent has handled bidding wars in the past and will ensure that you only deal with credible potential buyers.