Getting into a bidding war when buying a property need not be a nightmare. Outfox the competition with these strategies.
Few who lived through the heady days of frantic property buying in the early 2000s will ever forget the auction process that invariably reared its head every time a 'decent' property came on to the market. Estate agents had their hands full with offers that were usually above the selling price, while sellers sat back and watched in awe as their properties ended up selling for more than they ever imagined.
We may not be in exactly the same boat at the moment, but the market is definitely hotting up. According to Richard Grey from Harcourts, the supply of quality homes for sale in preferred areas is dwindling. This means, he says, a competitive offer from another buyer can quickly result in the dream home you've just found becoming nothing more than a mirage.
“Of course most buyers prefer a home that is ready to move in to. Many are willing to pay a premium for this which can translate into a full-price offer from a competing buyer, and perhaps even one that exceeds the seller's asking price."
As things stand, now is not the time to delay a buying decision. In other words, if a buyer finds a home that ticks all the right boxes he should make an offer as soon as possible to avoid another buyer entering the picture.
However, Grey says that this isn't the only way a buyer can ensure that their offers are successful.
Proof of a sizeable cash deposit as well as a home loan pre-approval, that can be shown to the seller, should boost the chances of an offer being accepted.
“It also helps to be honest with the seller about your serious interest in the property. You should make it quite clear that while you are prepared to negotiate the terms of your own offer, you are not willing to be thrust into a bidding war with other potential buyers.
"Our experience is that genuine sellers will respect the fact that you are making a well-considered offer on the property, are open to negotiation and can show that you really do have the financial capacity to buy the property.”
It's extremely disappointing to hear that a seller has rejected an offer, but buyers should keep their wits about them and remember that the one thing worse than losing their dream home to another buyer is overpaying for the property as a result of a bid and counter-bid battle.
Remember that it's not only the selling price that will be affected when you pay more for a home.
Transfer costs, an increased deposit as well as the thousands of rands of additional interest on a bigger home loan are all going to form part of the equation.
We all tend to become overly emotional when we think something we desperately want is about to be snatched from our grasp. Experienced buyers keep a cool head and although they may well recognise the perfect home when they find it, will choose to walk away from the deal rather than enter into some sort of bidding war.
