A bidding war occurs when a home seller gets multiple offers. Since bidding wars are fairly common these days, it pays to plan ahead. You’ll reduce surprises and stress, and be better prepared to negotiate.
For instance, I tell both my buyers and sellers to think about how sellers can respond to multiple offers. Sellers have four options:
- Counter all offers by asking for a “best and final” offer. Then choose the best.
- Accept one of the offers outright.
- Pick a few offers to negotiate individually.
- Reject all offers and wait for new ones. (It happens, though rarely.)
Other details that can affect the offer:
- Sellers realize that the highest offer isn’t always the best offer. Terms can also make a big difference.
- Sellers know the appraisal could be a problem. Just because they accept a huge offer, doesn’t mean the appraiser will agree. Sellers may ask for funds to make up the difference.
- Buyers can consider adding an escalation clause to their offer, which says they will automatically increase their offer by some amount over and above the highest bidder, up to a certain cap.
I help my clients prepare for these and other scenarios during our pre-buying or pre-selling appointment. Contact me at (718) 399-3320 or henrywattsrealestate1@gmail.com to set up the initial consultation.