Real estate is a business, and like any business, a solid strategy is needed when buying your dream home. In Denver, Colorado, where the real estate market is hot, chances are you may need to compete with other potential buyers in what real estate agents call a “bidding war.”
In this case a seller and their agent will negotiate to find the best buyer, likely the one with the highest bid.
Denver is a market prone to bidding wars with homes selling fast in Denver. The price of homes in Denver has gone up 2.6 percent during the last year and the percentage may rise in the coming months, according to Zillow. The price tags on homes are also unlikely to be what a home sells for.
Also according to Zillow, an average of 21 percent of Denver homes sold for over the list price and 56 percent of them sold for under the list price in the last year. A real estate agent is your best resource to prepare to win a bidding war, and these tips can also help you know what to expect.
Know when bidding wars are most predictable
Some real estate market conditions may be more likely to produce bidding wars than others, and you might be able to predict a bidding war before it happens. April and May, which are generally considered to be peak real estate selling months, may be when you are more likely to experience a bidding war.
Bidding wars are also more likely during a seller’s market when there are not enough homes on the market to meet buyer demand.
Develop a pricing strategy
Whether a bidding war is clearly imminent, or you just want to be prepared to make your house competitive, developing a pricing strategy will be to your advantage. One way to encourage a bidding war and potentially get a better price for your home is to start low.
Buyers, seeing a great deal on a home, will then be more likely to line up and try to score a deal. However, the price needs to still be high enough to align with other similar homes on the market.
Take your digital marketing to the next level
Marketing a home for sale before it even goes on the market is another strategy that real estate agents follow, to create hype around a home and get potential buyers interested.
Getting the home ready to show, taking professional photos, and then creating a preview open house online to advertise that it’s coming soon can create anticipation and intrigue for multiple buyers.
Set a deadline
Once a home is on the market, sellers and agents can create a sense of urgency by setting a deadline for selling the home. This will let a buyer know that they need to act fast to lock in a bid and not miss out.
Organize an open house
To get the highest bid for a home, you want to create a situation where buyers know that they are in competition with each other.
If you’re anticipating a bidding war, then it’s the ideal time to schedule an open house, rather than individual showings. Knowing more than one person is interested can lead buyers to make a bid even sooner and offer more.
A bidding war can be stressful for buyers, and good news for sellers who can even get more for their homes.
