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7 Ways to Dodge the Housing Bid War

With interest rates lower than ever before, now is an excellent time to buy. In areas across the country, however, the competition can be steep and bidding wars aren’t uncommon. Of course, the best way to avoid a bid war is to buy your brand new abode from Ryan Homes. With Ryan Homes, your pricing is set, so no one can outbid you—or drive up the price of the home you’ve fallen in love with.

Still want to shop resale? Here’s what you need to know before you get into the home-bidding game. But don’t say we didn’t warn you!

Know the comps.

Before you even make a bid on a home, educate yourself on the selling prices of other homes in the area. If you’re using a real estate agent, he or she can provide you with all the information you need on comps for a particular neighborhood. If you’re buying directly from a builder that has developed a community, the builder’s agent can provide you the latest selling prices of the homes. If multiple offers do come in, you’ll be educated about how much is too much. Bottom line: You don’t want to overpay.

Limit the emotion quotient.

It’s easy to forget what you really want to pay for a house when you get swept up in a bidding drama. Always put in a bid for what you think the house is worth based on the comps—or what you’re willing to pay—and stop there. If you do lose a bid, be mindful of your next offer. Why? Homebuyers who lose bids are inclined to overspend on their next offer, because they don’t want to go through the emotionally draining experience again. Our advice? Calm down. There’s always another house.

Keep your mind open.

Bidding wars often take place in “hot” neighborhoods. If you must live in a sought- after neighborhood, know a bidding war is probably in your future. If this scenario isn’t up your alley, remind yourself that there are lots of other neighborhoods that won’t create this kind of competition. And, what’s more, those other neighborhoods will probably have some lovely homes.

Don’t go contingency crazy.

One last thought: If you’ve decided to make bids on homes in a popular area, don’t add lots of trivial contingencies. Things like, “Can you switch the color of the front door?” or a protracted closing date could sway the seller to a competing bidder.

Get pre-approved.

Before you start house hunting, make sure you’re pre- approved for a mortgage. Not only will a pre-approval letter from a lender help you understand what you can afford; but sellers also pay more attention to buyers who are pre-qualified. Sellers will know you can afford to buy their home and won’t waste their time. Even if your bid is lower than another buyer’s, your pre-approval letter might swing the deal in your favor.

Be slightly skeptical.

Unfortunately, there are sellers and real estate agents who list homes at low prices just to generate a bidding war. Unethical? Some people think so. But, it happens all the time. If a home is listed at a price that seems too good to be true, it probably is. Again, you don’t want to get swept up in seller-generated bidding drama—you want to be aware of what’s really going on.

Consciously pay to play.

If you do choose to bid in a popular neighborhood, make the best offer you can afford, but know it’s probably going to be more than the asking price. Show the seller you’re committed to buying the home by making a substantial deposit. And if you can meet the owner in person, go for it! Anything helps in a competitive situation.

Discover the Ryan Homes advantage.



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