Finding the perfect home is hard, only to have 5-15 others think the exact same thing. A bidding war in real estate is a lot like having ten soon to be brides all gunning for the exact same dress, which is the last one in stock. Let’s be honest, it’s going to get ugly and it definitely can be one of the most stressful times in a Buyers purchasing history. A bidding war starts and suddenly the dress becomes a do or die must have, willing to pay anything to secure it.
A newly listed home, in a good location, with a decent price tag is the wedding dress, and it is usually worth the fight. Then comes the 5-15 others who also are interested in the same property, making this a strategic pricing war. More people, means more stress, more worry and more anxiety. In the Las Vegas Market, homescreeping out of range, and when those affordable homes come on the market, it may not be exactly what one person wants, but as soon as they see it is a low commodity item, it suddenly has more value.
The Las Vegas Real Estate Market is experiencing a housing shortage and many bidding wars. Well-priced homes are selling with one day on the market, with multiple offers coming in at $5K, $10K, & $20K over asking price is common place. Experienced Realtors with a new listing ensure heavy traffic by buyers to view the property, but they also keep the window of opportunity tight to encourage a bidding war. Las Vegas homes recently brought on the market on a Friday might only be available through the weekend, with offers due the following Monday or Tuesday.
How do you stand out and shine above the rest to become the next owner of one of these popular homes? There is no solid, easy or patented answer to this question, even for cash investors. Bidding wars can be difficult, heartbreaking, and simply put.. annoying. You are bidding against a group of unknown competitors and are mostly blind to what the other parties are bringing to the table. The listing agent will sometimes give some vague advice, but mostly you run into agents who are neutral, giving all potential buyers an equal shot at being the accepted offer.
Do not give up or you will never get that dream home. It might take you a few tries to get your dream home, but you will find a strategy as you go along. The following steps are vital to ensure you have an equal shot in the bidding war process:
Use an agent to represent you in the transaction:
A good Realtor is your first strategic step. They will help you craft an offer that will rise above the rest. They will communicate with the listing agent and gain an understanding of what the seller maybe looking for, and hopefully be able to pull enough information out of the other agent to get a strategic advantage. While the highest offering price is usually important, there are many other factors to consider. You may still be the highest bidder, but something else is also equally important to the seller (i.e. larger deposit, appealing to the seller’s sentimentality about the property, who pays closing costs, etc). An experienced buyer’s agent has competed in multiple offers countless times and has a strategy for success. Follow their lead and listen to their advice.
Get an Approval before you start:
If there is a cash buyer, you are certainly in danger. Most people do not have the financial resources to pay cash for a property and have to procure financing to purchase a home. Be strategic and make sure you get an approval before you start writing offers. Sellers will not consider taking your offer if they do not have proof in hand you can do what you say you can. Be clear about what you can afford and have a full pre-approval is a key element in your strategy.
Be ready to be uncomfortable:
I have never worked with a buyer who won a bidding war who then after the fact didn’t feel anxiety or slight remorse that they overpaid for the property. Going for it and bringing the best you have to offer is extremely uncomfortable and can feel like you are being taking advantage by the market place and the seller. There are always times when it is wise to say enough, is enough that is too much and exit stage left. As your parental may have told you, if everyone is jumping off a cliff, are you going to as well? It very well could be jumping off of a financial cliff by severely overpaying for a property. Only you can decide what is too much to pay over the appraised value, it all depends on your needs and what the desired outcome.
Luckily, Las Vegas is a great investment, with the Raiders making Las Vegas their hometown, and the Las Vegas economy and construction jobs thriving, you investment should reap huge rewards over the long haul. Take a deep breath and lean into the discomfort.
Being the accepted offer on a beautiful property is quite an accomplishment and is worth the temporary strain required to get it. Put on your boxing gloves and get ready to enter the ring! Bidding wars are not comfortable for most buyers, but they can lead to rich rewards.
If you are a buyer looking to buy in the highly competitive Las Vegas Market, reach out and contact Valerie Brown today!