Those dreaded words that house hunters do not like to hear from their agent. Even the most competitive among us step back when we hear that we might be buying a home in competition, as if someone has conspired to make their lives miserable.
How can you eliminate this possibility? In short, you can’t. Because there are a finite number of homes available, there will always be the possibility of competition. Even in buyer’s markets, the best homes are still sought after!
The questions you should consider while buying a home in competition (market) are: “How can I reduce the risk?”, “How can I improve my chances if I am involved in a competitive situation?”, and “How can I not get so stressed out over the process?”
Let’s tackle question one first, because it is the closest to staying away from competition.
Avoiding Buying a Home in Competition
Shop when others don’t or won’t. Let’s face it, we all have obligations. Work, family, and more. So, unless we are in a time crunch, most of us look for new homes on the weekends or maybe convenient weeknights. When the weather is nice but not too nice. Choosing to look for homes when others are not, as soon as it hits the market, is one way to try and avoid competition. Go when the weather sucks. Look during (stat) holidays. Instead of camping like everyone else, go house hunting. You might be the only one.
When you see the home for you – strike! I know this can sound pushy. But the reality is that if you like a home, chances are others will too. That means when a home hits the market, make a point to view it as soon as possible. When you’re in the home and it feels like THE ONE, then sit down with your agent and put together an offer.
Look beyond the norm. If you go shopping for homes, you’ll see after a while they all look similar. Why? Because most people tend to want the same trendy things. But much of that is cosmetic. Walking into a home that looks a little different, whether that’s color, finishes, or layout, means fewer other shoppers will be drawn to it. Can you make it your own?
Dealing With Buying a Home in Competition
Make your first impression count. They say you only get one chance to make a great first impression. That’s even more the case when the first and probably only impression a seller will get of you is on a piece of paper. In other words, put your best foot forward the first time when you know you’re competing. Make your offer compelling enough to draw positive attention. Thinking you will be able to negotiate further is an assumption you cannot afford.
Think clean and neat. Sellers are not different than you. They want to be able to easily understand your offer. How much is it for? When is possession? What conditions are you putting on the transaction? If all those things are reasonable, you have a shot. Adding in a lot of unusual or complex clauses, terms and conditions makes your offer less appealing.
Ask yourself what price you are willing to win at. What are you willing to lose it at? If you were to hear, for example, that a property sold at $20k more than what you lost at, what would your first thought be? Would you think, “I would have paid that much!” or would you think “That’s okay, that was too much for that house.” What about if it was $10k more? Or $5k more?
Be willing to tell your story. It is often that a seller wants the next person who buys their home to love it as much as they did. If the seller is a long-time owner, then letting them know who you are and why you want the property can go a long way to swaying a close decision. If they know you are someone who will try to love the property as much as they did, you may increase your odds. Of course, if the seller is a business, a flipper or any of the above, it won’t matter. But it often can’t hurt.
Keeping Cool While Buying in Competition
Keep your love in check. It’s obvious that if you are willing to put an offer on a home, and further willing to compete for it, you have a strong desire for the property. But it is still important not to fall in love with the property lest you not win.
Quell your inner competitor. Have you ever been to an auction and watched two people get into the competitive spirit, so much so that they refuse to let the other person win? The $100 valued item goes for $500. Auction houses love that. But thinking like that as a home buyer can result in you paying more than you wanted. DON’T BUY INTO YOUR COMPETITIVE SPIRIT!
Listen to the professional you hired. You asked your agent to represent you. They have experience and data you do not. Let them do their job. Be honest with them about financing, your motivations and all of that. It will help them battle for you and back down when you are too close to the edge or charge forth when you are determined to do so.
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