When I think of the bidding wars that are happening in Portland I can’t help compare it to attempting to have brunch with my husband on a Sunday. He is always bummed when there is a long wait and inevitably looks across the street at a restaurant with no wait. I have to constantly remind him that there is a reason there is a long line – the food, service and atmosphere are amazing. That’s why people are willing to wait. I think the same thing happens when a new home comes on the market in a desirable location at a good price – buyers begin to line up on the porch eager to attempt at an accepted offer. Like at the popular brunch spot, the line is a signal the property is worthwhile.
Portland real estate is still experiencing a lot of bidding wars. Well priced homes go pending in a few days, usually with multiple offers and above asking price. Frequently, agents who represent a hot home will ensure there is plenty of opportunity for eager buyers to view the property, but keep the window of opportunity short. For example, the property may go on market on a Thursday with two open houses over the weekend, then offers will be due Monday evening or Tuesday morning. This gives consumers little time to evaluate their decision to purchase. This can be totally frustrating and annoying.
How do you win a bid when you don’t know who your competition is or what they have to offer? Some times your realtor can tease out information from the listing agent, but a good agent will remain neutral and try to give every buyer a fair chance at an accepted offer.
Don’t get discouraged! It may take a few tries at making offers on your next home, but you will gain market knowledge quickly and learn how to strategize. The following steps are important when seeking to win at a bidding war.
- Use a good buyers real estate agent. I will help you write an offer that will rise to the top of the pile. This is because I will communicate with the listing agent and find out what is important to the seller. Often these terms can help offset the price. For example, a recent client of mine offered the sellers a 60-day rent back period in order to win the bid. This was attractive to the sellers because it allowed them plenty of time to find another home. Remember, the best offer isn’t always the highest dollar amount.
- Be far along in the loan process. All cash buyers are the biggest dangers in a bidding war. Cash offers are so attractive because they can close quick and there isn’t the risk of the home having a low appraisal. With that said, most of us don’t have the resources to pay cash for a property and need to procure financing to purchase a home. With new lending guidelines and disclosure requirements (TRID), the loan process takes longer. In fact, agents must use a 45-day close on all offers requiring a loan. Working closely with your lender prior to starting to write offers will definitely help the process along. You must be clear about what you can afford and have full-preapproval.
- Get ready for some discomfort. Buyers who win bidding wars almost always feel some degree of anxiety, fear and/or doubt about over paying for the house. Going for it and bringing the best you have to offer is extremely uncomfortable and can feel like you are being taken advantage of. This is where you need to lean on your agent. I will counsel and warn you if I think you are following the crowd over a cliff. However, in this market you must be prepared to get close to the edge. Luckily, Portland real estate is a great investment, and your efforts should reap huge rewards in the long run. Take a deep breath and lean into the discomfort. Being the accepted offer on an awesome property is quite an achievement and is worth the short-term strain required to get it.
With that said, dust off those boxing gloves and get ready. While engaging in a bidding war may not be comfortable for you, the results may lead to rich rewards. Just as any one who’s ever waited in line at Mother’s or any other great Portland brunch spot knows too well.