Homebuyer Tips to Navigate a Bidding War

Amber Sky Home Mortgage, a trusted direct lender and leader in New Jersey home mortgage rates, loans and refinancing, provides homebuyers  with tips to navigate today’s competitive housing market as sales activity increases and bidding wars reemerge.

“As sales activity increases quality inventory declines creating the reemergence of competing offers,” said Michael I. Sema, President of Amber Sky Home Mortgage. “For the first time in many years homes are selling for over market value, and with a lack of new home construction and still incredibly low mortgage rates, buyers are frenzied over prime real estate. It is crucial for these buyers to speak with a certified mortgage specialist and get pre-approved so that they know exactly how high they can go on a bid, without over-extending themselves.”

Amber Sky Home Mortgage offers some tips to prospective homebuyers to ensure they are winning when they are bidding:

1. Get pre-approved-- Homebuyers who get pre-approved before they start searching for a home will better understand the total cost of ownership.  Total cost of ownership includes the principal of the mortgage, interest, property tax, and insurance.  By getting pre-approval homebuyers will be less likely to overextend their offers by getting into a bidding war they cannot afford. 
2. Getting pre-approved over the phone-- Despite what some Mortgage Loan Officers (MLO) might say there is no such thing as getting pre-approved over the phone. If an MLO is willing to give a homebuyer pre-approval for a mortgage without submitting income documents that should raise a red flag as to the business practices of that mortgage company. To get pre-approval for a loan a customer should have to submit tax returns for the last two years, their last two pay stubs, and bank statements for the last two months.  Also pre-approval does not necessarily mean a borrower is locked into that loan agreement.
3. Trust your realtor-- When making an offer on a home it is important for homebuyers to trust their realtor’s knowledge of their market and guide them to a fair bid. In certain high demand areas like a bid below asking price will be rejected and potential buyers will lose their prospects of that home.
4. Lead with the best offer—Sellers likely will not want to go through multiple re-bids, meaning that homebuyers who are serious about winning a bid, should lead with their best (or near best) offers.
5. Show flexibility—Show a homebuyer that you are willing to be flexible with closing dates, to provide them the time they need to find alternative housing. By leaving the closing date open for the seller to decide, bidders can make their offers more attractive.

Placing an offer on a home is likely to be both a stressful and exciting experience for a prospective homebuyer.  By staying informed and proceeding cautiously, it can also be the most rewarding. To speak with a certified mortgage specialist call 1-866-955-5655 or visit amberskyhomemortgage.com.