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How to's and money-saving tips from resident homeowner and mortgage professional, Cathy West

Navigating a bidding war

Navigating a bidding war

Anyone who has been thinking of getting into the housing market in the past several months probably knows full well how much competition there is from other would-be buyers. To that end, it's probably wise for shoppers to at least approach a potential purchase with the idea that they're likely to face some sort of bidding war. If they don't end up having to outbid someone else, that's great, but if they do, there are certainly some things to keep in mind.

Perhaps the smartest move any potential buyer can make when they try to get into the housing market is to work with a realtor or other type of real estate pros who can advise them adequately, according to U.S. News and World Report. Typically, these professionals have been through countless bidding wars in the past – and certainly that number would have been on the rise in recent months – and can help prepare clients for any potential issues they might encounter, and better understand how to deal with them.

Where to begin
Generally speaking, real estate agents will be able to advise clients that bidding wars are likely before they even happen, and that may allow them to start the bidding process with a strong offer that's more likely to be accepted, the report said. Moreover, other aspects of the bidding process can be streamlined so that sellers are more likely to accept a bid.

This can include ensuring all paperwork and associated data is ready to go and clearly organized and, more important, that they have preapproval on the mortgage, the report said. Having to wait even a little while could lead sellers to look elsewhere.

Other things to keep in mind
It's also possible to build what is known as an "escalation clause" into a bid, meaning that if there are other bidders, sellers would be authorized to simply bump up the number without having to check with the buyer, up to a certain amount, according to Florida real estate expert Ron Goldstein. That kind of flexibility could really pay off, especially if other contingencies are kept at a minimum. It's important to remember that sellers are people, too, and they're likely just as anxious to get a home sale closed quickly, so working with them a little more cooperatively could go a long way.

Some experts even recommend that hopeful homeowners should write a "love letter" to sellers, explaining just what moving into a home would mean for them, according to the New York Post. While this obviously has no financial impact on a sale, it may give particularly articulate shoppers an edge when it comes to humanizing their desire to own a home.

With all this in mind, a little research online about the state of the local market and what more can be done to boost a bid's likelihood of being accepted can go a long way toward ensuring buyers can get through the process as quickly – and smoothly – as possible.

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