If you've had your eye on the housing market at all, you may know that there is a huge shortage of apartments available for sale right now. On top of that, mortgage rates are very competitive and it is not surprising that bidding wars among buyers are extremely common.

In a bidding war, two or more potential homebuyers outbid each other on the same property in the hopes that the seller will accept their respective offers. Bid wars can be extremely frustrating for everyone involved – even more so if you lose one – so it pays to be strategic. Here are a few signs it makes sense to engage in a bidding war.

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1. The selling price is initially competitive

In today's hot real estate market, many homes are listed at sky-high prices. However, once you find a home that you like with a reasonable list price, it may be worth entering into a bidding war, especially if the price in question is well below the high end of your price range.

Imagine you can spend up to $ 500,000 on a home and see great property for $ 475,000. Even if you enter a bidding war at this point and have to pay an additional $ 20,000 in the process, you will be within your financial comfort zone on costs.

2. The home ticks all the right boxes

If you can find a home to take or leave, it's not worth fighting for in hopes of making it your own. On the flip side, if you manage to find a home that is really perfect for you – it has the right layout, number of bedrooms, and the features you want – then it may be a home that it is for worth fighting for.

This is especially true in today's market. Because inventory is so limited, you might really struggle to find a home that suits your needs – so you shouldn't be giving up easily on a home that does.

3. As far as you know, there is only one other potential buyer

A bid war with multiple buyers can be a harrowing process that you might want to avoid. But if it's just you and another buyer, that's a different story. At this point, bidding for the same home might not take too long, so it might be worthwhile to race against that buyer and see if you can get that person to give in.

Bidding wars are rife in today's housing market, but there isn't a rule that says you have to be part of one. However, when entering a bidding war for a home, do so strategically and follow your real estate agent's advice. The last thing you want to do is overpay for a house. So be careful when bidding and know when to leave.

source https://seapointrealtors.com/2021/08/09/how-to-know-if-its-worth-entering-a-bidding-war-on-a-home/

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