Skip to main content

7 Things You Can Do to Win a Bidding War

By U.S. News & World Report

Get a leg up on the competition.

So far 2017 has presented a hot spring real estate market fueled by high demand and low inventory. Buyers are doing their best to stay ahead of rising interest rates, but they are often confronted with short time frames to view properties and end up competing against multiple offers. What can you do if you find yourself in this situation? Let’s take a look at seven strategies for creating the strongest offer in a competitive homebuying situation.

Learn about the local market.

Think of market value as a small spectrum of prices. On the back end, you are getting the house at a great price — indicative of a buyer’s market. The front end is the top dollar you would pay for the home without overpaying — a perfect example is today’s seller’s market. The sweet spot in the middle is a price that’s mutually beneficial for the buyer and seller. If all homes in a neighborhood appear to be selling for top dollar, don’t expect to get a similar house in the area for a steal.

Assess the comps.

Throughout the house-hunting process, you’ve gained a strong understanding of the market and how far your dollar will go by viewing homes and following what they sell for. Now that you’ve zeroed in on a specific house, take the time to review the most recent sales of comparable homes with your agent to determine its actual value. While preparing the offer, assess the comps and find out what part of the spectrum you are willing to pay for the house. Be sure to set your expectations accurately considering the perceived demand for the house as well as local market trends.

Ask questions.

Do not assume the sale price is the be-all and end-all for the sellers. Have your agent find out where their priorities lie before constructing your offer. Depending on their life situation, previous real estate experiences and other important factors, there may be other ways to strengthen your offer. One example is to find out their ideal settlement time frame. While some sellers like to be out as soon as possible, others may want a longer timetable or lease-back to accommodate the purchase of their next house.

Have your deposit and financing in order.

Again, the strength of your offer is made up of many factors. The deposit is an area you may be able to fortify by increasing the amount, showing the seller you’re willing to put your money where your mouth is. You should also talk with your lender to find out what loan options are available. It is imperative you don’t overextend or put yourself in a financially perilous situation. That said, there are certain mortgage programs a seller will find more attractive than others. Be responsible and financially knowledgeable to put yourself in the best position possible, both in the short and long term.

Include an escalation clause.

This is where it gets fun: An escalation clause can be added to the offer to incorporate incremental jumps in price above the highest offer. There is a cap in place to dictate just how far you’re willing to go. An escalation clause is an excellent tool to span the “fair market bubble,” as it allows you to be highly competitive while not paying more than necessary. If there are three bids on a property listed for $500,000, you can write a full-price offer with an escalation up to $525,000 that increases in $5,000 increments. If the second-highest offer is $510,000, you would only have to pay $515,000.

Write a letter.

A hand-written note can tug at the owner’s heartstrings and tilt the scales in your favor. Focus on what drew you to the house and what left the greatest impression. Don’t tell the seller what was wrong with the property or what you’d do to improve the property, but explain how you plan to make it your home. Don’t include a picture to avoid violation of Fair Housing laws. You don’t want the seller to feel any pressure one way or the other in their decision based on race, color, national origin, religion, sex, disability or family status.

Remember to breathe.

This may be the most beneficial (and overlooked) factor of all. Fast-paced seller’s markets can often cause frustration and anxiety, leading to poorly thought-out decisions and buyer’s remorse. Be sure to take a step back and analyze your thought process, decision and the short- and long-term ramifications. Rather than letting your competitive nature or emotional attachment to the property get in the way, take a moment to breathe and collect your thoughts before submitting an offer. This will help ensure your aha moment doesn’t become an “oh crap” moment six months later.

More from U.S. News

The Best Apps for House Hunting

Weird Home Features That May Confuse Homebuyers

10 Must-Ask Questions When Choosing a Real Estate Agent

7 Things You Can Do to Win a Bidding War originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Frustration grows in Venezuela as earthquake death toll reaches 1,430

Israel and Lebanon sign framework agreement with US in ‘first step’ toward peace, Rubio says

Trump-endorsed populist poised to become Colombia’s next president as rival challenges vote