Tips for homebuyers in Virginia Beach Bidding Wars

Buying a Home in Bidding Wars

Bidding wars occur when there are multiple offer situations when the seller or selling agent motivates prospective buyers to compete with each other for the highest bid, a bidding war usually ensues. In a bidding war, potential buyers try to progressively outbid one another, with an intensity of an auction.

A bidding war also occurs most likely in a hot seller’s market situation – when there is a small listing for the buyers to choose from. At the same time, a property’s desirable location, its quality, and its school district also add to the possibility of a bidding war happening.

What is a Real Estate Bidding War?

In real estate, a bidding war is when two or more potential property buyers trying to compete with each other through progressively increasing bids for ownership of the property. This situation commonly happens when the stock of housing in a desirable or popular location is low.

Just like in an auction, a bidding war is fast-paced. This makes the prospective buyers vulnerable to rash purchase or investment decisions.

Why is there an Intense Bidding War in Virginia Beach?

As early as January 2022, Virginia Beach is one of the 10 cities in the country recorded for their highest bidding war rates. Redfin listed Virginia Beach as 8th in the highest bidding war rates in the country, at 75% offers receiving competitive bidding wars.

Barry Jenkins – Better Homes & Gardens Real Estate | Real Estate Agents in Virginia Beach, VA has been quoted to cite the high influx of military populations appearing in the Hampton Roads region wanting to purchase a home quickly.

According to Barry, listed properties usually last, at the longest, around 15 days. That has created a situation of more people wanting to buy and not enough homes available to buy as yet, buyers end up vying for the same property.

How to Compete in a Multiple-offer Market

Here are some tips shared by Barry Jenkins on how to ace your first time buying a home in bidding wars amidst a fiercely competitive market.

Every detail matters

Barry emphasizes the importance of details of the buying process as a potential buyer. Each detail in your offer is critical in beating the competition. Like the type of loan, the offer price you make, and if a home inspection has been done. You and your real estate agent must scrutinize everything in the offer.

Prepare for action

Barry’s advice is that in order to make a strong offer you must hand in all documentary requirements for it early. This will prove your sincerity to the seller and that you are a serious buyer of that property.

Have your Pre-approval Letter in Hand

If you require financing, one of the first documents you will need from the loan officer or bank, or mortgage company is a preapproval letter. This is something most sellers require as evidence of your capacity.

The pre-approval letter proves the bank or mortgage company vouches for you as a potential buyer, showing your serious intent in the house. This is your financing backup. More importantly, in a fierce competition market, it sets you apart from your competitors.

Appeal to the Seller

Each seller is different from the next, in one or more ways. Some sellers want the deal to close quickly, others need more time for their families to move out. To make a better competing offer, put down a deposit on the purchase price or listing price (if they’re different) if you have enough cash. That is called an earnest money deposit, it is your buyer’s proof to the seller of earnest determination to purchase the property.

Find out the particular needs of the seller and meet those needs to better beat the competition in multiple offers.

Wait it out

“Don’t be afraid to wait,” further adds Barry. Most people find it easy to move to a new home, or their dream home by placing an offer immediately upon finding a house they’re interested in and fulfilling the seller’s closing costs quickly. Regardless of the fierce competition in the market, he says waiting like a week is not necessarily a bad move. Instead of viewing houses as soon as they are listed, waiting a week would be a better situation for you. It could become your dream home because the waiting time would allow you to get some assistance.

Reach out for Help

More tips from Barry include getting an agent who will give buyers, you, their attention and effort – this takes a huge burden and stress off your shoulders. This allows the sellers to handle never-ending bid details that keep changing and buyers to focus on figuring out these and other details.

Secure an inspection contingency

Barry further advises against making an offer on any house listed in the market that has waived home inspections. Talk to your agent about getting an inspection contingency. Also known as due diligence contingency, this gives you, as the buyer, the right to have the house inspected within a specific period of time.

The results of the inspection would be critical to closing the deal – you could negotiate to spend your money on repairs to the house or you could cancel your bid.

Be hopeful

Barry concludes his tips with encouragement. There might be a competitive market for a dream house at the moment but he avers that there will always be a chance, another chance for you to get a great property at fair market value.

Creative Ways to Craft a Competitive Offer

The Virginia Beach VA housing market has been competitively hot in this pandemic. Mortgage rates went low, and WFH (work-from-home) became the norm, thus, motivating people to buy and move into their own homes. A great number of offers have been facing bidding wars since May 2020.

This year is seeing the mortgage interest rates rising, there are now buyers who are having difficulty getting more money to be able to make a cash offer or pay the asking price or even meet the property’s closing costs.

How Home Buyers Win Bidding Wars

The potential buyer who has sufficient financing to pay higher than the appraisal price is usually the one who wins in a bidding war. In buying a home in bidding wars, you would need a good agent who can take you through the whole buying process and allow you to acquire your dream home whether you have the cash to pay the full price or need financing.

There are sellers who prefer all-cash payments instead of a mortgage, this would get you to win the bid even if your offer is less than the list price.

Regardless of how you wish to go about buying a home in bidding wars, you definitely have a higher chance with real estate agents in Barry Jenkins – Better Homes & Gardens Real Estate | Real Estate Agency in Virginia Beach, VA as your agent. Call him now at 757 6545059 or send him an email at barry@yourfriendlyagent.net.