As mentioned in our blog post last week, this spring is going to bring record high prices to the Boston real estate market. Use these three tips to come out on top the next time you find yourself in a real estate bidding war.

1. Ask the listing agent what closing and contingency dates the seller prefers

A direct dialogue about what terms the seller wants is perfectly normal, but very few buyers or agents ask. Communication increases your chances of the seller choosing your offer over the competitor who wants to close quickly or delay.

2. Larger down payment increases your chances

The difference between 15 percent down and 20 percent down can mean a world of difference to a seller. Sellers believe (rightfully so) that a 20 percent down payment means your lender is more likely to give you financing. Why? When a lender offers a buyer financing, their mortgage rate decreases as the buyer’s down payment increases.

3. Make a price escalation offer

Making a price escalating offer is a trade secret we utilized in the proper situation. When done correctly, price escalation offers allow a buyer to start at a lower offer price and beat out a competing buyer by offering a higher price.

Let’s break it down with an example:

Buyer 1 offers $500,000. There is one competing bidder (Buyer2) that has a standard offer at $505,000.  Buyer 1 has an escalation clause that states he will pay $2,500 over any competing offer with a max of $510,000 & will need written proof of the said bona fide offer. Because of this clause, Buyer 1 is accepted at $507,500 and gets to review Buyer 2’s offer (which shows $505,000).

Find yourself in need of more real estate tips or guidance? Contact our office.