When it Comes to a Bidding War, Cash Gets the Job Done

The housing market is as hot as ever! As soon as a sought-after property is listed, it’s sold. Because of this, there are frequently multiple offers coming in at a time—which leads to a bidding war. According to a recent study by a national real estate broker, the only way to win in those types of situations is with a cash offer.

This study, which took place between June 2020 and February 2021, shows homebuyers who offer all cash increase their chance of winning a bidding war by 290%. The second most effective way for winning a bidding war, according to the study, is to waive the financial contingency. This tactic improves the homebuyer’s chance of winning the bid by 66%.

Another area highlighted in this study is the ineffectiveness of making an offer under asking price. With the high demand of homes, below asking price offers can’t compete. In fact, many cash offers should come in over asking price.

According to the study, “agents are reporting that well-priced single-family homes are receiving dozens of offers, and in some areas desirable homes are so competitive that they’re selling for hundreds of thousands of dollars over asking price.”

As a real estate agent, what can you do to help your clients in these competitive bidding war situations? Here are some great tips from agents across the country:

• Educate your buyers: let them know they may be asked to waive appraisal contingencies
• Show buyers homes that are $75,000 under their budget so they can have room to bid—and win.
• Be prepared to sweeten your offer
• Identify what the seller is most looking for, and try to make that happen
• While we wait for the market to adjust, it’s important to remind our clients that there are ways to make their offers more appealing.

Velocity Title continues to move your clients forward

At Velocity Title, we understand the demands of the current housing market, and how busy things are for real estate professionals. Using the latest title technology and resources, we are able to get your clients to the closing table quickly by streamlining the entire process. To learn more about what we can do for your clients, click here or contact us today.