As a real estate professional, you never stop learning. Some skills are used almost daily, while others come up once in a blue moon. One secret to why Homesale Realty experts are so successful is that we have one of the industry's best processes for learning new skills.

That includes high stakes edge-cases like bidding wars.

Bidding wars start when two or more prospective buyers compete directly to purchase a property. Put simply, they don't happen every day. In fact, a bidding war is unlikely outside of specific circumstances: A market where buyers greatly outnumber sellers.

If a market is busy and a home is uniquely desirable, bidding wars can happen suddenly.

It's crucial to have negotiating skills at the ready when a bidding war strikes. Buyers who enter it unprepared can find themselves vastly overspending their budget or making concessions that aren't wise in the long run. Emotions run high, and poor decisions might be made.

So, how can you advise your client on navigating a bidding war?

Keep these tips in mind:

1. Remember that Cash is King
   When sellers have multiple offers on the table, the last thing they want to do is embrace uncertainty. Bidders whose funding isn't in the bag—either in the form of cash or an underwritten preapproval—are at a major disadvantage. If bidding threatens to exceed your client's financing, be sure they bring the situation to their lender's attention for a review of their financing eligibility.
   
   
2. Help Your Client Decide When to Bail Out
   No matter how enticing a property is, no buyer should chase it indefinitely. Before the bidding war heats up, sit down and go over the situation in detail. Ensure your client is clear on why they're choosing to pursue a certain property, how far they are willing to go, and when they will "bail out." That's especially vital if they plan to go over their original budget and may end up with more house than they can comfortably afford.
   
   
3. Cut Out Contingencies Wisely
   Money in hand means your client won't need to include a financing contingency in their agreement. Another common way to sweeten the deal is to cut the home inspection contingency, essentially agreeing to purchase the property "as-is." Beware, however, that many lenders insist on a home inspection and will not finance a home with severe issues. Be sure your client knows their responsibilities.
   
   
4. Understand the Seller's Motivations
   You can often uncover ways to excel during a bidding war by looking closely at the seller's motivations. Why sell now? It's a simple question, and one most sellers are glad to answer. If the seller needs to move fast, focus on opportunities to speed up the process. If they're in the middle of buying another home while selling the current one, agreeing to let them stay a few extra weeks can help. Be creative and zero in on win-win solutions.
   
   
5. Write a Personal Letter to the Seller
   If a seller has plenty of similar offers to choose from, a personal connection becomes the one thing money can't buy. It doesn't always happen, but a personal letter from your client to the seller can work wonders. Help them craft a message about why they love the home and what it would mean to them to be chosen. Now and then, you'll strike a chord that motivates the seller to look at the situation in a different light.

Want to be ready for anything, even in the toughest negotiating situations? Contact BHHS Homesale Realty to join the team with the tools, technology, and techniques to succeed in any market.