Looking To Buy In A Popular Neighborhood? Here Are A Few Tips To Help You Survive, And Even Win, A Bidding War

You've found a house so amazing that it blows your must-have list away – but there's a problem. This once-in-a-lifetime house is also in a great neighborhood and a stellar school district, making it very attractive to a wide variety of buyers. You're not ready to give up yet, but have never been in a real estate bidding war before. Don't lose out on the house of your dreams and instead, here are a few tips to help you survive, and hopefully win, your bidding war:

Get Your Finances In Order Now

Even if you're in the "just looking" stage of the home buying process and you're really not sure if you want to take on the responsibility of a mortgage, if you find a house you can't pass up, it's vital to get your finances in order.

This starts with securing a mortgage preapproval, and if you are squeamish about the current interest rate, consider a 15-year loan instead of the traditional 30-year loan. The interest rates are generally lower and because you're paying the loan off more quickly, you'll actually end up spending thousands less on that amazing piece of property.

Bring the mortgage preapproval paperwork with you when presenting the offer to let the seller know you're serious and have the funds available to stay competitive.

During this initial stage, Diana Olick, a contributor to CNBC, recommends setting aside some cash to offer the seller in the offer, even if it's not until the final offer. Just because the seller isn't asking for money initially doesn't mean they won't require some cash at closing – especially if the bidding war is heating up.

Add A Few Attractive Incentives to Your Offer

When it comes to winning a real estate bidding war, having the most money to offer the seller isn't necessarily what will win the day.

Instead, here are a few other attractive incentives you can include in your offer that might just win the seller over:

  • Agree to a short escrow – the shorter the better, if this is what the seller wants. Even if this means you'll have to pack up your current home in a few days, if allowing the seller to close in less than a week might ultimately be the deciding factor.

  • Be willing to compromise on what the seller wants – including certain items from the home. For example, if there is a spectacular, antique fireplace mantel in the sitting room that you really want, consider letting it go if the sellers are adamant about keeping it.

  • Get an inspection lined up, and be willing to overlook a few minor repairs. For example, if the carpet in the master bedroom needs replacement, take this expense on yourself instead of insisting the seller replace it. This will make the seller know just how interested you are in purchasing their home.

  • Be willing to pay all the closing costs and increase the amount of earnest money you put down. Both of these incentives let the seller know just how serious you are about purchasing their home.

Finally, if you can't seem to make your offer stand out, don't be afraid to appeal to the current owner's sense of nostalgia. Write them a thoughtful letter expressing how much you love their home, and how you cannot wait to create some new memories with your family!

Walking into a bidding war can be scary, and exhilarating. However, before you get caught up in the excitement and drama, ask yourself if you're taking on more of a financial responsibility than you can handle. In the end, it is not worth ruining yourself financially to live a home that is remarkable, and completely out of your price range!