How to Prepare for a Bidding War
Updated: Oct 17
55% of August 2020 home sales resulted in a bidding war
69% of homes sold were on the market for less than a month
With so few houses available, competition is heating up among homebuyers. In Colorado Springs the average sales price of a single family home is up 11.8% from 2019 prices. Today the average price is hovering around $410,000. This price range (and below) is our hottest market. And what I've found is competition doesn't diminish until we get up into the $800,000 (and above) price range.
Bidding wars are the new norm. So what can a buyer do to prepare for this?
1. GET PRE-APPROVED
A mortgage pre-approval shows that a mortgage loan officer has reviewed your finances and determined your are qualified to get home loan. You will want a pre-approval letter to present a long with your offer. This helps sellers take you more seriously. Offers with pre-approval letters are most respected.
2. KNOW WHAT YOU CAN AFFORD
Be prepared to cover general expenses beyond your mortgage such as utilities, general upkeep and other unexpected repairs. And if the home you want needs some updating or repair, factor that into your budget.
3. MAKE YOUR BEST OFFER
On average, there were over 3 offers for every home sold in August. This means buyers have to go in with a strong offer in order to even be considered. Don't play the lowball game "just to see what the seller's temperature is." Go in strong, with the best offer you can stomach. Pull out all the punches like offering to waive contingencies or offering to close in 3 weeks instead of the typical 30-45 days. If you can pay cash and don't need a mortgage for the purchase, even better! Most sellers appreciate a cash offer which does not require the appraisal and other conditions and can probably close much quicker.
With so few houses available on the market today, being ready for a bidding war is essential for prospective homebuyers.
A seasoned Realtor with YEARS in the business is your best ally in a competitive market like this. We know what is needed to get the job done.
Let’s connect today to be sure you have the guidance you need as the competition for homes heats up this season.