Despite real estate market conditions in Southern California softening in 2019, bidding wars are still being waged among prospective buyers chasing after their dream homes. Even when housing market conditions are balanced, the most attractive listings often elicit bidding wars, which is why prospective buyers should be ready to face this scenario. When it comes to Irvine, California, homes for sale, conditions will always be competitive because of the higher quality of life in this city, and many of the choice listings can be expected to be in high demand and may require implementing the following measures.
1. Set Realistic Goals
Median prices in Irvine have come down since 2018, but they’re still fairly high when compared to other metropolitan areas. Realistic goals should be based on home affordability, which comes down to what your monthly payments will look like after closing. Keep in mind that home affordability calculations mortgage lenders make don’t usually include personal household expenses.
2. Get a Mortgage Preapproval Document
A good way to start looking for your dream home is to estimate home affordability by using an online calculator, adding personal expenses, and getting in touch with a mortgage loan officer before heading into town to look at properties. The idea is to gain a competitive edge over other prospective bidders, because many sellers won’t accept offers from individuals who haven’t been preapproved for mortgages.
3. Write a Personal Letter
Not all sellers are in it for the money. There’s nothing preventing a homeowner from accepting a bid from a single mother whose young children seem very excited to move in. In this case, a heartfelt letter appealing to the seller’s emotions may be effective.
4. Propose an Escalation Clause
Real estate agents who are veterans of bidding wars often have escalation clauses in their arsenals. An escalation clause is similar to live auction strategies whereby participants raise their bids, but since home buying isn’t a live event, such bidding action has to be put in writing. In essence, the buyer makes an offer and promises to escalate or increase it by a certain amount should the seller receive a higher offer. It should be noted that the higher offer should be of a bona fide or reasonable nature.
5. Make a High Offer
Tendering a high bid for your dream home is a common-sense strategy, but you have to go back to the initial step related to setting realistic goals. As for how high your bid should be, the best advice should come from your real estate agent.
6. Get a Private Appraisal
Let’s say a seller hasn’t appraised the property or doesn’t wish to disclose having done so. If getting your own appraisal is within your budget, you can use it to make a rational bid. The homeowner will take this is a sign that you’re very serious about purchasing the property, and you can use it to negotiate the final price.
One of the best strategies for getting the home of your dreams is to work with experienced realtors. Whether you have your eye on a cozy bungalow in University Park or a high-end condo in Quail Hill, Irvine real estate deals can be much easier to navigate with a reliable professional by your side. Trust the friendly agents at Irvine Residential Living when you’re ready to find the home that’s perfect for you. Give us a call at 714-454-6304 to schedule an appointment.