Buying or Selling Your House – Things To Keep In Mind During A Bidding War
Real estate market today tend to favor one side, the buyer or the seller. Regardless of whether you are in a booming market or a stagnant one, it is wise to learn significant strategies that will help you make the best deal and come out a winner. Arm yourself with knowledge and learn how to negotiate your way through a bidding war; there are hundreds of thousands of dollars at stake.
Understanding The Market, You Are In
Whether you are the seller or the buyer, do your research the current real estate market in your local area. In addition, know what comps are selling for and how long they have been on listed for sale. As the property seller this can help you stand firm on your asking price and not take any low ball offers. On the other hand, as the home buyer do not overbid just to outbid someone else and end up overpaying for the home.
Depending on which state you reside in, real estate law dictates that if a property does not appraise for the amount offered, the buyer is not legally obligated to purchase the property and vacate the contract. Tis typically causes issues for the property seller since they may have been passed up on by potential buyers since it was pending sale. But even though the potential buyer has been released from the contract, he or she still has invested money in an inspecting or appraisal and will not be able to get that money back no matter what!
Both buyer and seller should evaluate the neighborhood comparables (CMA) before agreeing on a selling price. It is not enough knowledge to know how much the houses are listing for; you have to know how much they are being sold for. This is the basis an appraiser will use to determine the appraised value. The best way to quickly find out the listing price vs. sold price is to talk to your Realtor who has this information at their fingertips.
Understanding The Different Types of Mortgages
The highest offer does not always make the best offer, especially if you need to sell your house fast. It matters to a seller what type of loan the buyer has. seller’s closing costs depend upon the type of loan being secured. For instance, FHA and VA prohibit a buyer from paying certain closing costs, and these costs are shifted onto the seller of the property.
The best-case scenario for a seller is obviously cash, but next to that is a conventional loan. A higher offer on a VA or FHA can actually yield a lower bottom line than a lower offer on a conventional loan. The length of time it takes to close may vary as well, if you are a seller searching, “sell my house fast,” finding a cash buyer would be your quickest route by far.
Having Everything In Order And Be Ready To Act
Taking care of everything first, so that buying or selling your house is an easy process. If you own the home, have all legal documentation available. i.e., a divorce decree, probate papers, mortgage payoff, a list of any liens against the property and receipts if they have been paid.
If you have a survey, check with the title company who will be closing the transaction or a real estate attorney and see if it is acceptable. This can save on closing costs. Survey fees are a negotiable fee in most states.
A buyer should have his loan in place with a pre-approval letter in hand, not a pre-qualification letter. There is a difference. A pre-qual letter means the buyer meets all the requirements concerning income, credit, and debt ratio. A pre-approval means he is approved and secured. A buyer with pre-approval is a stronger contender in a bidding war.
Property Inspections
A home buyer should never make a purchase without an inspection. At times it could become tempting, especially in a bidding war, there can be legal consequences that result from it.
Many states have disclosure laws about latent defects that are present at the property. To avoid any possibility of legal action in the event of an undisclosed defect, a wise decision for the seller is to have the home inspected. You will know what repairs are likely to come up. If you have the money, make the repairs, and make the inspection list available to potential buyers. In addition, it can reduce the likelihood of an inspection contingency on an offer. As a home seller, it is an excellent strategy that can help you stand firm on your asking price. For the home buyer, it helps in determining the price to offer; if he knows the repairs have already been made, he can bid more confidently.
The bottom line is, in any real estate transaction, the best offer is the cleanest offer, one that offers a fair price, is accompanied by proper documentation, and is free of contingencies.
Finally, use an experienced Realtor. Entering into a bidding war on a property is not the time to be second-guessing your real estate savvy or strategy. Realtors know the market, and they know how to negotiate in a timely manner to help you sell house fast.
