Our real estate agents know buyers can find themselves under a lot of stress if a bidding war breaks out. When comparing Albany homes for sale, buyers want a price they can feel good about—but they often feel like they have to stick it out and bid on a home they fell in love with.
Having the advice of a real estate agent you trust is one of the most important ways to avoid bidding war mistakes. Your agent is there to help you understand the process, know the fair market value of a home, and make informed decisions.
Still, independent research—like the kind you're doing right now—can be helpful. The more prepared you are, the more confident you will feel when the pressure is on. A bidding war can be highly charged and emotional, so careful decision-making is paramount to success.
Bidding war mistakes have become commonplace as the market heats up. The situation is especially tough on buyers in the most desirable neighborhoods. That said, a little foresight and planning can be exactly what you need to navigate a bidding war successfully.
Let's look at five of the biggest bidding war mistakes and what to do instead:
- MISTAKE: Bidding Every Penny You Have
In Albany, houses can go for tens of thousands of dollars above the listing price. But it is crucial not to be drawn into a high-stakes bidding war where you put down every dollar you have. This can raise the overall cost of ownership if you need a heftier financing package. Even if you are paying in cash, you will be left without resources you might need for repairs. Always hold back 10%-40% of what you can afford.
- MISTAKE: Bidding with Tons of Contingencies
Contingencies can sink your efforts when dealing with two or more other bidders. Of all the common contingencies, buying contingent on the sale of your existing home is the most fraught. A seller is always motivated to choose the bid that offers the least uncertainty. Getting a pre-approval for your mortgage loan streamlines the process considerably so you can compete with cash bidders.
- MISTAKE: Avoiding Contingencies Completely
Buyers may feel pressed to release all contingencies to sweeten the deal for a recalcitrant seller. But there are some contingencies you should simply never do without. Waiving your rights to home inspection is a bad move. Not only is the inspection required by most conventional mortgage lenders, but it can reveal electrical, plumbing, and other issues that may be astronomically expensive.
- MISTAKE: Assuming You'll Have a Second Chance to Bid
Sometimes, sellers get advice from their own agents telling them to let a bidding war simmer. This gives them the chance to entertain multiple rounds of bids while the would-be buyers get more competitive. However, today's market moves so fast that this is often not considered necessary. Don't assume your seller is playing the long game—always try to put your best bid forward from the start.
- MISTAKE: Trying to Play Hardball (Especially Early)
Today's sellers have so many opportunities they don't need to chase after even the best bids. Using a phrase like "best and final offer" might sound great on an episode of Shark Tank, but it will rarely have the desired effect in real life. Instead of bringing the buyer back to the table, you will end up in a much weaker position, as any additional counter-offers you make will not be taken seriously.
Contact us for personalized homebuying advice.