How to avoid a bidding war – and why

When the property market is “hot” as it is at the moment, and the supply of quality homes for sale in your preferred area is dwindling, a competitive offer from another buyer can quickly result in the dream home you've just found becoming nothing more than a mirage.
“Of course most buyers prefer a home that is ready to move into, and many are willing to pay a premium for this advantage – which can translate into a full-price offer from a competing buyer, and perhaps even one that exceeds the seller's asking price,” says Richard Gray, CEO of the national Harcourts Real Estate group.
"Alternatively,delaying your decision to make an offer while you think things over may create the opportunity for another buyer to jump in and snap up your perfect home.”
However, he notes, serious buyers can do much to ensure that their offers are successful, starting with home loan pre-approval that is documented and can be produced for the seller, and a sizeable cash deposit.
“It also helps to be honest with the seller about your serious interest in the property, and third, you should make it clear that while you are prepared to negotiate the terms of your own offer, you are not willing to be thrust into a bidding war with other potential buyers.
"Our experience is that genuine sellers will respect the fact that you are making a well-considered offer for the property, are open to negotiation and can show that you really do have the financial capacity to buy the property.”
However, Gray says, if the sellers choose not to accept your offer, you should keep calm and remember that the one thing worse than losing your dream home to another buyer is overpaying for the property as a result of a bid and counter-bid battle.
“For a start, overpaying means more money for the deposit, higher transfer costs because these are based on the price and, over the years, thousands of rands of additional interest on a bigger home loan.
“And on top of that,buying at an inflated price means a slower build-up in home equity – which means that if you are forced to sell before the house realises significant appreciation you may even have to pay in more money to clear your homeloan.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    • 16 Jan 2018
      The start of the new year is symbolic of new beginnings. A good time to take stock of one’s possessions as well as how necessary they actually are. However, seeing as the process may appear daunting – a plan goes a long way.
    • 16 Jan 2018
      The Western Cape is still in the throes of a severe drought and many households have to adjust the way they use and save water. It is a little more complicated in sectional title schemes, however, as it is not that easy to implement grey water systems for multiple users and it is also difficult to monitor water usage accurately if there are no separate water meters
    • 15 Jan 2018
      In ideal rental situations, when a lease is signed the tenant will stay for the full duration of his lease without any complications and the landlord will uphold his obligations, creating a win-win situation for tenant and landlord.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us