Bidding Wars Fueled By Low Inventory and Mortage Rates

graph showing home price increaseThe low housing supply can be blamed on a great many things but the COVID-19 crisis has to be one of the top reasons. Many people pulled their homes initially because they were uneasy with strangers coming to their homes. While virtual open houses and other social distanced ways to sell and buy a home continue through the months some people have decided to relist their property. Combining that with the historically low mortgage rates then you may find many areas that are low on supply but have a high demand for properties.
The result of this situation, that the pandemic has had a hand in, is an increase in bidding wars. While there is no easy way to win a situation like this there are a few tips to be successful. First of all money is often the only thing that will help. In order to be successful you have to be comfortable with how high the amount can rise to and be prepared to show that you are pre-approved for that amount. Increasing the amount that you will put down can also sweeten the pot and may work to your advantage. In a perfect world paying directly to the buyer in cash can be a plus although this is only applicable in certain situations. 
Waiving contingencies can make the deal go through as well but you have to be prepared for the consequences that come along with it. The contingencies give the buyer and seller wiggle room to renegotiate the deal so you may get stuck with something you can’t change. By including an escalation clause you can prepare for a situation of a bidding war. Your real estate agent can help you include that and make sure that you are comfortable with the amounts you are willing to go up to. Being able to speed up the buying process you may give yourself a boost in the seller's eyes so anything you can do to help that will go a long way. 
Finally, it doesn’t hurt to get personal when it comes to buying a property that is really important to you and your family. By including a letter expressing your reasons for wanting the property you may sway the favor of the seller.
Winning a bidding war can come down to strategy and luck. Having a good realtor to help you in any situation will be to your benefit. If you are thinking of buying a home in the near future please give one of our Agents a call and we will be able to help you through these strange times.