How To Win A Property Bidding War
Demand for properties has skyrocketed since the first national lockdown in March 2020. As a result, over a third of homes for sale are getting three offers or more.
How can you make sure that yours is the winning bid amidst such fierce competition?
- Get Your Finances in Order
A seller will not view your offer favourably if you can’t show that you have the finances to back it up. Assess your finances and speak to a mortgage broker to get an idea of how much you can borrow. When you’ve found a mortgage deal that suits you, request an “agreement in principle”. This does not guarantee you a mortgage, but it gives the seller a strong indication that the lender would approve an application from you.
Having an agreement in place makes you a much more appealing prospect as a buyer than someone who has nothing to demonstrate their offer is genuine — and you’d be surprised how many people make an offer before checking how much they can afford to borrow!
- Charm the Seller
If you know there is a lot of interest in a property, go all out to make the seller like you. If they are hosting their own viewings, this is an excellent opportunity to emotionally engage with the vendor and create a great impression. Talk about shared hobbies, smile, be polite and compliment their taste in decor — charm the socks off them!
If yours is one of several offers, the seller will be much more inclined to sell to someone they like if all other considerations are equal.
- Make Yourself a Chain-Free Buyer
A chain-free buyer is the holy grail for sellers. One in four house sales in the UK fall through before completion, often due to property chain problems.
If your house purchase is not dependent on any other transaction, the buyer knows that there is a much lower risk of delays or a failed sale. This could make you a more attractive prospect than another bidder, even if their offer is higher. When a house sale collapses, it causes a lot of stress and expense, which most people are eager to avoid.
If you can sell your house fast, you’ll be at the top of the seller’s list of buyers and what’s more, you’ll be in a strong position to negotiate the price down.
- Keep It Simple and Be Flexible
A seller who has several offers on the table will choose the option that means the least hassle for them. Sure, the price is a key factor in whether or not your offer is accepted, but it’s not the only one.
If all the offers made are similar, the seller will start weighing up the pros and cons of accepting each one. Are you in a chain? Are you a cash buyer? But also, how easy will it be to sell to you? Avoid adding contingencies to your offer, for example, insisting that certain work is completed before the sale proceeds. And be as flexible as you can when it comes to agreeing on a timescale for exchange and completion.
- Increase Your Offer
This might seem like a no-brainer. It’s a bidding war, after all. But not everyone is in a position to significantly increase their initial offer. If you can find a way to do so, this could give you the edge.
Consider your finances and intentions carefully before bumping up your offer. Is this likely to be a forever home, or will you be moving on in a few years? Are there plenty of similar properties to choose from in the area, or is this a rare gem? Resist the temptation to bust your budget — committing to a huge mortgage or other debt will lead to a life of misery. If, on the other hand, you’ve managed to sell your house, this puts you in a great position to accurately assess how much cash there is to spend. Set a maximum budget and stick to it.
Buying in a seller’s market can be challenging, but it’s certainly not impossible to bag your dream house — even if several buyers are vying for it. Get your finances in order, set a maximum budget and if you can, position yourself as a chain-free buyer to stand the best chance of winning a bidding war.
