Should You Write a “Love Letter” to a Home Seller?
Dan S | Apr 26, 2022
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By Stella W on Dec 3, 2021
You found it! The listing for your dream home. After months of searching, finally, here it is.
The house has the perfect number of bedrooms, the right number of bathrooms, an enormous walk-in closet and so much storage space you’ll have to buy more stuff to fill it all. The backyard is to die for, and it’s also near a dog park. Restaurants and shops are nearby and the neighborhood elementary school is the best in the county. Best of all, you can actually swing the asking price. Score!
There’s just one problem. If the home is in Denver, you will almost definitely have competition.
To get their hands on the home they want, Denver homebuyers have been going toe-to-toe in heated bidding wars for the past year. According to one real estate agent's research in the spring of 2021, the majority of houses were expected to sell above list price. Sometimes far above.
A bidding war happens when a seller gets multiple offers on a house or condo, and potential buyers must compete by submitting new offers to the seller.
Learn more about what causes bidding wars, and the strategies you can use to win one.
Low inventory and low interest rates have sent homebuyers on the prowl all over Denver.
Even though the Denver real estate market has cooled down a little in the past few months, "cool" is all relative. Most sellers can still expect more than one offer on their house or condo.
Denver home prices are still at record highs. The median selling price for a home in the Denver metro area was $545,000 in June, according to the Denver Metro Association of Realtors. Those prices are up six figures from early 2020. That means if anything comes on the market that seems even remotely affordable, expect a bidding war.
If the house needs only a few repairs and improvements—expect a bidding war.
If it’s near restaurants, coffee shops, bars and nightlife—expect a bidding war.
A desirable property with a great location, nearby amenities, good schools, parks and rec, will tempt more buyers to compete, even going beyond the seller’s asking price. A bidding war can raise the price tag anywhere from a few thousand to more than $100,000 over listing price.
So what happens in a bidding war? Once the seller gets all of the bids, if there are multiple offers to choose from, the seller can choose one or allow prospective buyers to submit new bids.
The seller might be looking for the highest possible bid, or other terms like an earlier closing date, waived contingencies, or a more convenient financing option, like an all-cash offer—or all of the above.
Many first-time buyers are surprised to learn that the highest offer isn't necessarily the automatic winner. The best thing to do before getting carried away by a bidding war is to work with your real estate agent to develop a solid plan.
Here are three strategies to consider for winning a bidding war.
Did you know that you don’t always have to have the highest bid to win? Sounds crazy, but making an all-cash bid might be more attractive to the seller than other more complicated options.
Partnering with Accept.inc. gives you the power to make a cash offer on a house even if you don’t have hundreds of thousands of dollars in the bank. Once you're Cash Approved™, you’re ready to compete in a bidding war with the power of cash. The best part? When you buy a house with cash the Accept.inc way, you can still pay for the house over time, just like a regular mortgage.
According to national statistics, a cash offer is four times more likely to win in a bidding war over an offer with a mortgage. And Accept.inc’s buyers save on average $13,000 in multi-offer situations, when compared to the highest offer. That means that even when the offer isn’t the highest, making a cash offer may give you a huge advantage and help you win a bidding war.
An escalation clause in a real estate contract states how much you would be willing to raise (or "escalate") your offer price in response to a higher, competing offer that the seller receives. The clause sets a specific amount above the competing offer you would be willing to pay, up to a maximum limit.
Talk with your real estate agent about whether to use an escalation clause with your offer.
Think of how to solve problems for the sellers and make their lives easier. Whether it’s offering the seller a quick closing or covering the cost of home improvements and repairs, anything you do to reduce risks, costs, and hassle for the seller could make your offer stand out as the most attractive option in a bidding war.
Work with your real estate agent to choose the strategies that will fit your goals, financial resources, and the current state of the market. Your real estate agent can advise you about when to make your move, and when to play it cool. Get organized, be prepared, and stay informed!
Ready to start with a big advantage when shopping for houses in Denver? Learn how to make a cash offer in Denver, with Accept.inc at your side.
Dan S | Apr 26, 2022
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