The global property market hit the brakes when Covid-19 struck in February. Since then drops in lending rates, fiscal policy initiatives, and new demand trends created a resurgence in activity; led mainly by people trading-out of cramped apartments into larger homes offering more space.
For particular property types, prices are back at pre-covid levels, some even selling above their asking price. Their landlords are seeing their prices bid upwards, and they’re riding that gravy train.
Enter: Bidding Wars! But how can you emerge as the victorious broker?
Whether it’s a luxury mansion in LA, a popular residential villa community in Dubai, or a fashionable commuter town near central London, when the market is lit and a property is hot, a bidding war’s bound to happen.
Here are 3 top tactics to get you battle-ready:
Cash is King
It’ll come as no surprise to you that sellers find all-cash offers more attractive than any mortgage, even if the offered price is lower than others. Cash buyers statistically transact at discounts between 9% and 20%, compared against their financed peers. Make sure your buyer has cash.
If your buyer’s not in a position to make a cash offer, increasing their down payment and making sure they have all their ducks in a row to speed up the mortgage process is critical so as not to lose precious time obtaining approvals. It helps if they’re working with a reputable lender and have a pre-approval in place; it just gives vendors more comfort.
When a house your buyer will like comes on the market (or if possible, even before), it’s essential that they view it immediately. Pick up that phone and literally tell them to drop what they’re doing, grab their proverbial chequebook, and join you for a viewing.
Make sure they are mentally, emotionally and financially charged. You want them at that biting point where they know all they can know, and all they need to do now is to make an immediate offer.
Terms and Conditions Apply
Conditional offers are common in real estate transactions, but keep them simple. You’re aiming to agree terms that are as close to friction-free as possible for all parties. Avoid deals with long lists of conditions. Don’t make the sale contingent on things like repair work; just price up the cost and deduct it from the sale price.
The Fog of War
Ultimately, when you’re bidding against others don’t let the fog of war diminish your visibility. Keep a clear head. Ratcheting up your client’s price is not the path to victory. Your offer must be simple so that the process flows smoothly, giving all parties confidence that the deal will be finalized without any hassles.
Because winning a bidding war isn’t just about price, it’s where the vendor perceives their risk to be.
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