In today’s real estate market housing inventory is extremely limited… Many sellers are refraining from listing their homes due to economic or COVID concerns and low mortgage rates, led to a surge in consumer demand. Thus, home prices rose sharply at the national level, making it even more difficult for new buyers to enter the market.
The problem is compounded by the fact that so many homes on the market have ended up in bidding war… If you are not familiar with this concept, a bidding war occurs when two or more buyers continue to make offers for the same property in the hope of buying it. One buyer will make an offer higher than the asking price of the house, and a competing buyer will respond with an even higher offer. After a series of subsequent reciprocal bids, the winning buyer usually pays significantly more for the house than the seller originally requested.
Trade wars usually work to the advantage of the seller, but they can be stressful and costly for buyers. But fortunately, the percentage of homes that are being traded is finally starting to decline. And if this continues, it will be easier for buyers to navigate the housing market.
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Applications for military activity fell in June
The share of properties facing trade wars fell to 65% in June from 72.1% in May and 74.1% in April, according to Redfin. This is good news.
The bad news is that the June numbers are still up 56.8% in filing wars compared to June 2020. June also marked the 14th consecutive month that more than 50% of listed homes were announced by multiple bidders.
How to win in the auction
While the bidding wars may have finally subsided, today’s buyers still have to deal with them. If you are trying to buy a home, there are certain steps you can take to increase your chances of winning it.
First, get pre-approval for a mortgage… This does not guarantee you a home loan, but it will send a signal to sellers that you are not only a serious buyer, but that your finances are such that you are likely to get. mortgage… This, in turn, minimizes the seller’s risk.
Another way to win the trade war? Be very flexible with the closing date. Your salesperson may be trying to delay your closure for several months. If you can work with it, do it.
Finally, feel free to write a so-called real estate love letter in which you explain to a specific seller why you really want to buy the home you are betting on. Interestingly, Oregon recently banned these letters for fear that they could lead to discrimination, but in most states they still remain on the table.
The fact that the statistics of the bidding war is falling is a positive thing for buyers, but it does not mean that you yourself will not face such a problem. Do your best to give yourself an edge and get away from success.