Are You Stuck in a Bidding War?

Let’s discuss the bidding war. You’ve been to many open houses, have been on many home tours with us and now you have found the home of your dreams! Let’s get the offer written.

First we need the following information we’ll need to compile the paperwork:

  • Your legal names and current address
  • How much do you want to offer?
  • What is your deposit amount (this is the money that will stay in escrow until closing, a portion of your down payment)
  • How much is your mortgage? (typically 80%)
  • Your remaining down payment (down payment minus deposit)
    • Example: $900,000 offer, 10% deposit ($90,000), 80% mortgage ($720,000), 10% due at closing ($90,000)
  • Don’t forget your pre-approval letter or proof of funds
  • When do you want to close?
  • What do you want to include?

Uh oh – we just found out that this house is also someone else’s dream house and now there is a bidding war.

What can we do to make your offer stand out?

Here are a few ideas for making your offer stand out – use one, all, or some:

  • Use of an escalation clause – attached here – you make an offer, you state an increment and a cap
  • Limit inspections – many buyers are agreeing to limit inspections to major mechanical, structural, safety, environmental
  • Offer to take care of the township inspections ($90 – not a big thing, but not a common thing for a buyer to offer)
  • Offer an odd number – ie: $951,500 or $977,250; most people go up in round numbers.
  • Limit the appraisal contingency – this requires a conversation with your lender. I’m seeing contracts come in stating that buyer will proceed as long as the property appraises for list price opposed to contract price. Happy to talk this through.

For more videos on the home purchase process, visit our YouTube channel: JBlanchardhomes

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Jennifer Blanchard is a Top Producing real estate agent in Basking Ridge with over 18 years of experience. She would love the opportunity to discuss any real estate questions you have.

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