Did you know that 70% of home offers were part of a bidding war in January 2022?
In today’s real estate market, bidding wars are the norm. They allow buyers to get a much better property at a better price than they would otherwise.
If you are wondering what the pros and cons of starting a house bidding war are, this short and simple guide is for you.
Pro: You’re Getting What You Want
This is the best benefit of starting a bidding war on a house. If you have your heart set on a particular property, then why not go for it? The worst thing that happens is that you lose out on the house, which means it wasn’t meant to be yours, anyway.
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Con: It Might Be Difficult to Be Approved
If you don’t have a lot of cash or have bad credit, it may be difficult to get approved for a mortgage quickly enough to beat out other buyers who qualify. If this is your situation, you may end up having to pay more than is necessary because you’re competing against others who can act immediately on their offers once they’re accepted by sellers.
Pro: It’s an Easy Way to Get Top Dollar
If the seller knows other buyers are waiting in the wings, then they’ll likely want to get what they can from their property before someone else bids higher than their asking price. This means you’ll be able to get more money for your money than if there were no other offers on the table at all.
Con: It Can Be Stressful
The downside of starting a bidding war is that it can be stressful. The initial excitement that comes with getting into a competitive situation can quickly turn into frustration when other buyers suddenly decide they’re willing to pay more than you.
Pro: You May Get a Better Deal on Your Mortgage
Some lenders will give you a lower rate if they know you’re competing with others for the house. They know that if they don’t give you a lower rate, you may walk away and find someone else who will.
Con: You May Have to Wait for the Seller’s Response
If you’re in a bidding war with other buyers, the seller may take their time deciding who they want to sell their house to. You’ll have no control over this, and it could mean that you lose out on a great deal.
These Are the Things to Know Before Starting a House Bidding War
A house bidding war can be exhilarating, but it can also be stressful and intimidating for first-time buyers.
As you set out to find your dream home, make sure that you don’t get caught up in the excitement. Consider all the pros and cons of a bidding war before you decide to jump into one headfirst.
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