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Top 10 Tips on Winning a Bidding War on a House in Colorado
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Top 10 Tips on Winning a Bidding War on a House in Colorado

How to win a bidding war

If you’re in the market for a new home in Denver, or anywhere in Colorado, right now, it’s time to get prepared. More than 40% of potential home buyers are getting caught in bidding wars—and losing.

With some properties on the west coast racking up 122 offers in one weekend, and some wannabe homeowners sending out more than 20 unsuccessful offers, you need an edge in the house bidding war.

We’re here to help you get it.

In this article, we’re unpacking the 10 top tips you need to win a bidding war on a house in Colorado.

Table of Contents

Start with a bidding strategy.

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Approaching a bidding war without a strategy is a recipe for disaster. You’re always on the back foot if you don’t come prepared.

Creating a strategy gives you an edge on the competition in a few key areas:

  • Strategy helps you to stay calm and remove emotion in a bidding war
  • Strategy encourages you to stick to your plan, and come across as more confident in dealing with agents, vendors, and rival bidders
  • Strategy ensures that when you win, you’ve done it on your terms

Some points to establish are what your counter offer(s) will be, who will liaise with the agent, how long you are willing to spend on the bidding process and negotiations, and when you will pull the plug on negotiations.

Talk with the real estate agent first.

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It’s tempting to skulk around at a home viewing and avoid engaging with a pushy real estate agent. In fact, that seems to be the modus operandi for most home buyers—but it shouldn’t be yours.

Introduce yourself. Ask questions to establish if other offers are on the table. Stay across the process by seeking updates from the agent, and be honest—without oversharing—about your interest.

Remember your budget (write it down if you must).

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It’s easy to get caught up in the emotion and competition of a house bidding war—but above all else it is important to remember what your goals are. Do you want to go broke buying a house? Do you want to overextend?

No.

So, write your budget on your hand before you take a call from the seller’s agent. If you’re buying on your own, take a trusted sidekick along to negotiations and let them intervene if you get carried away.

There’s no shame in walking away from a deal if the bidding gets out of control.

Pro tip: This doesn’t seem like a tip on winning a bidding war, does it? Establishing your position early on boosts buyer confidence and helps you feel more in control of the offer process—that is part of the winning mindset.

Make an aggressive offer.

You’ll need to be aggressive, and you’ll need cash.

A strong down payment and more buying power make your offer more appealing to the home owners, but coming through with an aggressive offer gains attention.

Coy offers come across as “trying your luck” or “tire-kicking”, both of which have no place in the sellers’ market we’re facing now. Go in bold, go in firm, and maintain your confidence.

Think about waiving contingencies.

When you make an offer on a home, you’ve got a few contingencies to consider. Sellers like offers where the buyer isn’t likely to back out—so the more clear you are about sticking with this house, the better your offer looks.

  • Loan approval contingency: If you’ve already been approved by a lender, you can waive this one. A loan approval contingency hinges on you being able to secure a home loan.
  • Appraisal contingency: In the current housing market, appraisals often don’t meet the asking price. If you have some disposable cash—excluding your down payment and closing costs—you can waive part of, or all of, the appraisal contingency.
  • Inspection contingency: An inspection contingency is usually included in a contract to have the seller cover any repairs—or adjust the sale price to cover the cost of repairs. Waive this if you’re comfortable doing so, but have a plan in place if your inspector uncovers something challenging.

PRO TIP: If you want to win a home next time you enter a bidding war you need to do all the things professional house buyers do to buy houses so I highly recommend that you spend some time learning about how they get it done. earning about their tips and tricks  

Present a good offer.

Show that you’ve taken the time to present a serious offer. Proofread it, run a spell-check, and tidy up your document and file names so they make sense. If you’re printing your documents, put them in order and keep them clean.

This is also a good time to mention punctuality. If you’ve told the realtor you’ll have the offer to them on Monday—have it there on Monday. It shows commitment, confidence, and that you are still a serious contender for the property.

It doesn’t matter where in Denver the deal is, you always have to present a competitive offer. It just makes sense right?

Make an all-cash offer.

This one might seem like a no-brainer to some—but if you have enough cash to buy a house outright, you should lead with that offer.

There are fewer homes on the market than at the same time last year, and more people vying for them. All-cash offers mean shorter settlement times for sellers, less competition for you, and less risk all-round of a deal falling through.

Pro tip: All-cash buyers will typically still conduct an inspection on the home—but they can usually waive the loan approval and appraisal contingencies.

Write a letter.

No, really.

There are three key elements that improve a buyer’s chance of success in bidding wars in 2021. First is the all-cash offer. Second is waiving a loan approval contingency.

Third is writing a cover letter. According to the Wall Street Journal, it can increase your odds of success by more than 50%. Making an offer in the top 10% of the market? A personalized letter boosts your buying power by up to 75% on luxury homes.

Keep the letter light and simple—don’t air your dirty laundry or use a sob story to manipulate the seller.

Let them know who you are, what you do, and a little about your family if they will be living with you. You can also tell them if this will be your first home, if you are downsizing now that the kids have left home, or if you are upsizing with kid #2 on the way.

Don’t expect the seller to hedge their bets.

With the market as competitive as it is, and the economy going through its own adjustments, don’t make an offer contingent on your ability to sell your current home.

If a seller is faced with two equal offers—and in this bidding war, we’re going to assume there are more than two!—the seller will choose the one with the least contingencies.

If you genuinely need your home to sell, you could consider a home equity line of credit—but be sure you do your due diligence before going down that path.

Consider what your sellers have planned.

Some sellers drag their feet because they need more—or less—time in the house. Again, talking to the real estate agent can help you establish what the vendors want.

Would it be better for them to move in the Spring? If so, could you consider renting the house to them until then? Are they selling to take up a job offer 6 states away—and it starts in 3 weeks? If so, are you able to speed up the process to get them freed up in time?

The more flexible you are as a buyer, the more opportunities you have to slot in with what the seller needs—and make your offer the most appealing on the table.

Final Word on winning a bidding war in Colorado

Getting caught up in a bidding war is a daunting prospect—but one that every home buyer needs to be prepared for. The house buying process doesn’t always have to come down to who has the deepest pockets, though.

Be prepared, be confident, and wield the tools at your disposal, and you could be coming out on top at your dream home bidding war.

Did these tips help you score your dream home? Comment below and tell us how you conquered the house bidding war!

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