Here’s Why You Keep Getting Outbid on Your Home Hunt (and What to Do About it)
Finding a house you love can be a difficult task in itself. But, especially in a seller’s market, it can be extremely difficult to find a home that you’re willing to put in an offer for, and beat out the competition. And in neighborhoods where the competition is steep, your purchase offer may be one of many, all with similar concessions and asks.
If you’ve been on the hunt for a home and have been outbid over and over again, there may be some things that you can do to make your offer more attractive and more, to stand out over your competition. But the first step is identifying why your offer is getting pushed aside in the first place.
Wondering why you keep getting outbid every time you put an offer in? You might be making one of the following mistakes:
You’re not bidding high enough
In a competitive seller’s market, hitting far below the asking price just isn’t the route you want to take if you want to walk away as a homeowner. In these types of scenarios, sellers are often receiving 10-20 offers in the first few days, and for asking price or more. This makes it all the more important to not make a seller feel low-balled, and go in with a competitive (but fair) offer. So, if time and time again you’re finding that you’re getting outbid, try going in with a higher initial offer.
You’re not adding a personal touch
Standing out is key when it comes to bidding wars. One of your opportunities to do this is by writing a personal letter to the homeowner. Your letter doesn’t have to be a sob story, sappy, or even particularly long. But it should include why you love the house, some features you loved about the home, and should thank the seller for allowing you into their home. While this may not seem like a big deal, these letters can go a long way, and can even tilt the scales in your favor in cases where others offer more.
You’re not being quick enough
When there’s a lot of action on a home, you need to be able to be nimble and respond quickly. For example, if you place an offer and the buyer counters, you want to be able to respond as quickly as possible, making the negotiation process as short as you can, and moving straight to the post-offer process. Likewise, be sure your realtor can get in touch with you when they need to, allowing them to relay information and act quickly on your behalf.
Have a pre-approval in hand
Often, realtors won’t even work with you in a serious capacity until they know that you have a pre-approval in hand. Why? Because that pre-approval lets them know that a lender has seriously considered you as a potential loan candidate, and will more than likely follow through with the loan should you find the home you’ve been hunting for. In this same way, a seller can feel more assured that you’re ready to make a purchase if you’ve already done the legwork of getting a pre-approval letter. Not only does this let them know that you’re serious, it can cut the time it takes to go through the buying process substantially.
Go all cash (if you can)
Of course, most of us would love to buy a home outright. And while that’s not a reality for many home buyers, it certainly is the ideal situation (and worth noting). If you find yourself in a situation where you’re able to pay cash for a home instead of taking out a mortgage, know that your offer will most likely shoot to the top of the list. Why? Because the process becomes that much easier if you’re simply going to write the buyer a check. Again, while this simply isn’t doable for many home buyers, keep in mind that for those that can, it might be a key advantage.
A home purchase is often the biggest purchase that a consumer will make. While that alone can make the process particularly challenging, when adding in additional stressors (like constantly being outbid), the road to finding that home can be even tougher. Remember, the key is to ensure that your bid puts yourself in the best light, and your potential seller in the best position when it comes to selling their property. By ensuring you’re making an offer that not only accounts for other bids, but humanizes you, you’ll have a much easier time breaking through the barrier and helping your offer to get accepted.
