How To Avoid A Home Bidding War
Q: My husband and I have been trying to buy a home for months. There’s been a bidding war for every home we’ve tried to buy so far. Do you have any advice for winning the next home bidding war we face? Bridget, Wayne, NJ
A: Because there is a severe shortage of single-family homes in the US right now (almost 4 million housing units!), many people now believe that home bidding wars are unavoidable. The problem with choosing to take part in a bidding war is that it allows other competing buyers to determine the price you pay for a home or property rather than you. For any home or property you buy, you should be the one deciding how much you’ll spend ideally based on your specific needs, your specific financial situation and financial goals. Obviously, in the real estate environment you and your husband find yourselves in where there are many more buyers than there are sellers, you should anticipate losing out to other buyers more often than not given the intense competition. You can always win a bidding war by paying too much money, but that may very well result in a Pyrrhic victory. The safer and more sensible approach is to determine your maximum offer price in advance before you even place an offer–since multiple offers on one property is the norm now, this approach will protect you from getting excited and doing something stupid in the heat of the moment. The bottom line is that when there is a huge supply and demand imbalance as there is now for housing, any individual buyer in any transaction is unfortunately at a disadvantage. Thanks for your question, Bridget. Good luck.
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