In most cases, being chosen as a renter for a new rental home is a simpler process than finding a house to buy, putting in an offer, and coming out on top with the winning bid. Many buyers find that their bid is not the only bid on a house, especially in a competitive area like the Atlanta, GA, real estate market.
When you're ready to buy a house and stop renting your home, make sure that you do your research when it comes to making an offer and winning a bidding war. Our real estate management team put together some insights to help you understand how to compete with other bidders (without overpaying for a home that exceeds your budget)!
Know Your Budget
To win a bidding war in the Atlanta real estate market, the highest bidder usually wins. Anyone can keep bidding with higher dollar amounts to out-bid competitive buyers. However, if your best bid wins, you could suddenly own a home that's more expensive than you can afford.
Smart buyers know their budget and bid within that amount. However, if other buyers put in an offer exceeding your budget, it's important to know when to walk away and find another home.
Get Preapproved (Before Bidding)
Even if a seller likes your offer, not being preapproved for a mortgage can ruin your chances of winning a bidding war. Preapproval shows the seller and their real estate agent that you are serious about buying the home and have the financial backing to do so.
Most sellers of Atlanta fine homes are eager to sell. However, they might be reluctant to accept your offer if you don't have a preapproval letter in hand. Getting preapproved means you've delivered necessary documents and done through the loan application process with a lender, and they've reviewed your finances and agreed that you meet the criteria for financing with specific conditions and up to a certain amount. So take time to get preapproved and improve your chances of impressing sellers for a new home in Atlanta!
Increase the Down Payment
Another way to increase your chances of winning a bidding war in Atlanta, GA, is to increase the amount of your down payment. Like preapproval, this will show the seller that you are serious about buying the home and willing to put your money where your mouth is.
Again, sellers are ready to sell! With an offer of more cash in hand and a creditworthy buyer, your bid can stand out to sellers from lower bids or buyers offering a lower down payment.
What are contingencies? If you can waive any contingencies, this will also show the seller that you are serious about buying and willing to offer more than the best bid.
When buying a home in Atlanta, GA, contingencies can include:
- Sale of a prior home. As a renter, you probably don't have a home to sell before moving into a purchased home. However, waiving this contingency means that even if a buyer doesn't sell their current home before closing, they will still proceed with purchasing the new house.
- Appraisal. Waiving this contingency means a buyer doesn't need to see an appraisal that matches the sale price to complete the home purchase.
- Flexible closing date. In some cases, sellers aren't quite ready to move out (even if they're eager to sell). When a home sells quickly, buyers can offer flexibility on the closing and move-out dates to make things easier on the seller.
- Home inspection. Most property management experts and real estate agents advise holding onto this as a last resort. Buying a home without an inspection can be risky. However, a real estate agent can also advise buyers about ways to waive some of the traditional conditions of a home inspection to help persuade a seller to access your offer.
Contingencies are in place to protect buyers and sellers, so be sure to consult a reputable real estate expert when considering waiving any of these items.
Pay in Cash
Saving a down payment for your first home can be the biggest financial milestone of your life so far. However, if you can pay cash in full for a house (without financing), sellers often find that a more attractive offer than a bid that requires a mortgage.
Consider An Escalation Clause
You've placed your best offer on a home, but another buyer comes in with a higher offer that the seller selects. To avoid this issue, consider adding an escalation clause to your offer. This part of a real estate contract tells sellers that if another buyer puts in an offer that's higher than your bid, you're willing to pay a specific amount more than that.
Atlanta, GA Real Estate Experts Can Help You Win a Bidding War!
Property managers do more than manage rental properties. When renters are ready to leave renting behind and become homeowners, your property management company can help you find Atlanta, GA homes for sale and guide you through the process. If you're ready to buy a house when your lease ends, reach out to Revolution Rental Management to learn how we can help!
Learn more about preparing for the cost of a new home! Download our free resource, the 'Home Buying Cost Worksheet: Prepare for Closing on Your New Home.'