–<\/span><\/p>\n3. Prove to the seller that the home is overpriced\u00a0<\/b><\/h3>\n
Being rude or condescending will get you nowhere. Even if you\u2019ve determined the home is overpriced, you should always be respectful. When making an offer on an overpriced home, include the reasoning behind your offer price (which is likely to be below asking). For example, you could include the findings of the comparable market analysis you or your REALTOR\u00ae prepared in the previous step.\u00a0<\/p>\n
[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.24.2″ _module_preset=”default” min_height=”35px” custom_padding=”0px||0px||true|false” da_disable_devices=”off|off|off” global_module=”1002″ saved_tabs=”all” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”54px||48px|||” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on” da_disable_devices=”off|off|off”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” global_colors_info=”{}”]<\/p>\n
4. Understand the seller\u2019s motivations<\/b><\/h3>\n
Ascertaining the seller\u2019s motivations can help you determine their priorities, which in turn, may help you avoid overpaying for a home. For example, some sellers may be solely influenced by the money and are willing to wait for the highest bidders. But others may be in a rush to sell their home and would be open to a lower purchase price if it leads to a faster home sale.<\/p>\n
–<\/span><\/p>\n5. Offer to buy the home with cash<\/b><\/h3>\n
There are few things more attractive to a seller than an all-cash offer. If you find yourself in the middle of a bidding war and can afford to buy a home with cash, you should consider doing so. All-cash offers that aren\u2019t conditional on financing are one of the most effective strategies for bidding on an overpriced home. Some sellers may even be willing to lower the sale price in exchange for the convenience and speed that cash home sales offer.\u00a0<\/p>\n
–<\/span><\/p>\n6. Remove all conditions<\/b><\/h3>\n
Just as all-cash offers are attractive to sellers, so too are clean offers without conditions. Offer conditions protect the buyer but they are often a burden to the seller. They slow down the homebuying process and put the transaction at risk if one of the contingencies is not met. Therefore, if you want to win a bidding war or make a lowball offer on an overpriced home more attractive, try to remove as many conditions as possible.\u00a0<\/p>\n
–<\/span><\/p>\n7. Promise a healthy earnest money deposit\u00a0<\/b><\/h3>\n
An earnest money deposit is an out-of-pocket expense that buyers pay when purchasing a home. A deposit is a sign of good faith but there are no specific requirements for earnest money deposits as there are for down payments. Generally, earnest money deposits range between 3% and 5% of the purchase price. However, the larger your deposit, the more attractive your offer becomes. So if you find yourself in a bidding war, we recommend offering a healthy earnest money deposit between 5% and 10% of the purchase price. It\u2019s important to note that the earnest money deposit isn\u2019t delivered until after the offer is accepted and the purchase agreement is signed. Therefore, when you submit your original offer, you should include a note stating that you are willing to make a higher deposit if your offer is accepted.\u00a0<\/p>\n
–<\/span><\/p>\n8. Add an escalation clause to your offer<\/b><\/h3>\n
One final tip for bidding on an overpriced home is to add an escalation clause to your offer. If the home is overpriced, then ideally you don\u2019t want to offer more money. But if you\u2019ve already made your offer terms as lenient as possible (for example, you\u2019ve removed all conditions), then including an escalation clause might be your best bet for winning a bidding war. An escalation clause can be an effective way of winning a bidding war without overpaying for the home.\u00a0<\/p>\n
\u00a0–<\/span><\/p>\nAn escalation clause is an article added to an offer letter that allows the buyer to increase their offer price up to a set amount if a bidding war occurs. In essence, the escalation clause stipulates that the buyer will pay a certain amount of money for the home. However, if the seller receives another offer of a higher value, the buyer will increase their initial offer by a certain amount. It\u2019s important to note that sellers do not have to accept offers with escalation clauses, and could request this clause be removed as part of their counteroffer.<\/p>\n
\u00a0–<\/span><\/p>\nEscalation clauses are useful tools when bidding on an overpriced home. Since they allow buyers to submit a competing offer without constantly worrying about being outbid, they alleviate some of the stress of bidding wars. They also allow buyers to determine the maximum amount of money they are comfortable spending on the home ahead of time, helping avoid any rash decisions.<\/p>\n
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