Jun 21

Mistakes Buyers Make in Bidding Wars

Mistakes Buyers Make in Bidding Wars

Multiple offers on a home sale are still common, and buyers may get caught up in the competition and make some mistakes in the process.

One common mistake: buyers who are willing to empty their bank account trying to win.

“I’ve had buyers who want to bid all the money in their budget in order to win a bidding war,” Lily Lei, a real estate professional with RSVP Real Estate, Powered by ERA, in Seattle, told realtor.com®. “I counsel them away from it. The house may require tens of thousands of dollars worth of repairs immediately, like a new roof or new plumbing. They would have no money left to cover these essential repairs.”

The bank’s appraisal may also come in lower than the offered price. The buyer then may be on the hook for a higher down payment to make up the difference.

Lei advises her clients to hold back between 10% to 40% of what they can afford. That may mean they can’t get the house they want, but it doesn’t put them at financial risk, she says.

Another common problem real estate pros report buyers making in bidding wars: bidding with no contingencies. Buyers are waiving home inspections and their ability to walk away when an inspection reveals a major flaw with a home.

“If buyers want to be competitive in this market, they need to compromise on a lot of things,” Jared Blank, a managing partner of The Agency in Denver, told realtor.com®. That said, when a buyer’s offer is accepted on a home that is in need of repairs and falling apart, it’s no win at all, Blank says.

He recommends instead bidding at a comfortable price within the buyer’s budget and looking for compromises on other components of the offer, like the length of the escrow and the down payment.

Source: 

“7 Bidding War Mistakes Today’s Homebuyers Are Making in Droves,” realtor.com® (June 2, 2022)

©National Association of REALTORS®
Reprinted with permission

admin

For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both.

Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary.

Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that “perfect” property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently.

When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting – or exceeding – his clients’ expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame.

For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania… call Anthony DiDonato.