Throughout the country and in North Carolina, home prices have been soaring. Because of the historically hot housing market, bidding wars have become the norm rather than the exception. High demand combined with low supply makes it important that a buyer know right away how to win a bidding war when it comes to buying a home.
According to CNBC, one thing buyers should do is come to the table with cash. Those who make a cash offer have the advantage because the seller does not have to worry that the loan may not come through. Some sellers may even cut a small portion of the price for those who pay with cash, although this is up to the individual seller.
If the buyer is unable to come up with the cash, Interest.com suggests coming prepared with a preapproval for a mortgage. This means the bank has already evaluated the credit report, assets, and income of the buyer and is prepared to loan them the money to buy a home. Most lenders will give the buyer a letter that verifies they are able to obtain the money necessary to buy the home, although they may not guarantee the loan until closing.
Another tip to help buyers win a bidding war is make a large deposit. Usually when an offer is made, the seller asks for a refundable deposit. Those who want to win the war benefit from coming with a higher down payment, even up to ten or 20%. If the buyer does get the house, the money goes toward the closing costs and down payment.