How to Win a Bidding War

First-Time Buyer

Do: Play up your flexibility. You’re not tethered to a mortgage, so emphasize that in your offer letter. “Sellers will like the fact that your financing isn’t contingent upon selling time.”

Moving Up

Do: Sell before buying. “There’s no such thing as bridge loans anymore. Banks won’t let you carry two mortgages unless you make enough to pay for both indefinitely.”

Don’t: Borrow your purchase-and-sale deposit money. (This is tempting if your savings is tied up in the equity of your old house.) Borrowed funds will be discovered in underwriting and could result in loan denial, even if you plan to pay back the loan right away. “There are creative and legal ways to come up with your 5 percent deposit, like a short-term 401(k) loan.”

Growing Family

Do: Commit to moving forward even if the bank’s appraised value comes in lower than the purchase price, thereby reducing your mortgage-approval amount. Stipulate that you’ll pay that difference out of pocket.

Don’t: Waive your mortgage contingency clause, unless you’re comfortable putting your money at risk. You will likely put down 5 percent of the purchase price by the time you sign a purchase-and-sale agreement. If your mortgage is denied, you can typically get this money back. But if you’re comfortable with potentially forfeiting this money or can pay cash, “stipulate that you are willing to waive your mortgage contingency and lose your deposit to show you’re a serious buyer who can afford the risk.”

Power Couple

Do: Pay cash. More than 50 percent of buyers need mortgages, but the most attractive buyers do not.

Don’t: Haggle over the inspection. To beguile an antsy seller, waive it altogether. After all, if money is no object, you can afford to fix whatever unsavory items a closer look might reveal. If you’re leery, add a clause that stipulates that you’ll pay repair costs up to a certain amount.

Empty Nester

Do: Use a niche lender to prepare your offer, especially if you’re moving to a retirement complex. Many coveted 55-plus communities are new and lack the sales history that typical underwriters prefer.

Don’t: Wait to declutter your current home. “Find a listing agent who specializes in sellers, because moving can be emotionally painful, especially at this stage.” You want someone with market knowledge—and emotional intelligence—so you can show your home in its best light.

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