How to win Real Estate Bidding War
Orlando is a popular city for buying real estate. As one who works day in and day out of the Orlando Real Estate market, there are some things that are easy to figure out. The real estate bidding war is alive and doing well in Orlando. Today there was an article published that real estate bidding wars are sweeping the nation.
Reasons for the Orlando’s Real Estate Bidding War
The number one reason for an Orlando real estate bidding war is a shortage of quality homes. Quality homes are homes that are updated and move in ready homes. These Orlando homes are in big demand and sell fast. Orlando’s housing inventory is low representing a 3.5 month supply, rather that the “normal” 6 month supply.
Lower priced good homes attract first time home buyers, retirees, vacation homes buyers, and investors looking for rental property. Competition is fierce in the entry level price range of $200,000-250,000. However, there is competition at all pricing levels. Buyers Broker of Florida just won a bidding war on a $2,100,000 property. The buyer is thrilled.
There is another reason that bidding wars are common. The Orlando home prices are rising faster and demand for affordable lower priced properties is skyrocketing. Orlando’s new median price has increased 12% since last May to $203,000.
How buyers can win bidding wars
Home buyers need to prepare themselves financially and mentally, so they do not get squeezed out of the Orlando real estate market.
Hire an Exclusive Buyers Agent. Not a traditional agent you normally find. Seek out an Exclusive Buyers Agent, not an agent that represents sellers. Only an Exclusive Buyer Agent can represent your interests and can work for you only on all properties. To get your offers accepted, your buyers agent will have to hustle and go above and beyond. Get your offers submitted timely, with a buyer agent specialist that can show case your offer in the best light possible.
Make yourself available. You will need to see the properties fast when they hit the market. There is no time to waste analyzing or procrastinating to submit an offer. You loose all your negotiating power when you wait till there are 3 other offers on the property.
Submit a strategic offer. As an Exclusive Buyers Agent, I let buyers know when to spend money and when to save money. Each property has different variables that requires a different offer strategy. When multiple offers exist the question become how high to you need to bid. We can help with that.
When a property looks really good, it will get offers within 24-72 hours of being listed. As a result, your offer needs to be strong right from the start because more offers will come in behind yours. The seller may just decide to pick one, instead of asking for your highest and best offer.
Get Comfortable on Appraisal issues. Competition among great properties are setting the bar with higher purchase prices than previous homes in the community. Finding appraisal comparable’s may be difficult due to bidding war prices. In the small chance the property does not appraise, there are options in the contract. You may just get your deposit back…or maybe the seller will reduce the price. Ask us how.
Your financing does matter…
Get your financing in order. How you pay for the property and what type of loan you are getting really does matter. Sellers in the market place will consider the financial strength of a buyer. The better financial strength is indicative of the buyers ability to close the transaction. This will determine which offer the seller selects.
Cash is viewed as the best offer to select. Cash offers do not normally do an appraisal which means there is less appraisal headaches for the seller. Next conventional financing, is more favorable with 20% down is ideal. Then lastly FHA 3.5% down , 0% VA, 0% USDA are not considered competitive loans in a multiple offer situation. Sellers and listing agents perceive buyers with that type of financing to have less money or lower credit scores.
If you are doing a loan with 0-5% down, then you need to do things in your offer to offset these negative perceptions. Offer a higher purchase price, increase your escrows, and submit a clean offer. We have had less competitive loans beat higher down payment loans and cash, but all this can be challenging.
Get a preapproval. Preapproval means all your loan documentation has been submitted to your mortgage broker and verified. You can also go one step further is to submit a Desktop Underwriting approval. This is an actual software approval on the specific home you are bidding on. It’s a great tool that buyers can use and this could give you a competitive edge to win the real estate bidding war.
If you are in the market to purchase a home in Orlando, contact Buyers Broker of Florida to get full representation on your transaction. Buyers Broker of Florida is the top Buyer Brokerage firm in Central Florida. 407-539-1053.