Bidding wars are the name of the real estate game. And when there is a bidding war, cash is king. A recent Redfin study confirmed that it’s a good way to win your dream house in a market this crazy.
According to the study, homebuyers who offer all-cash improve their chances of winning a bidding war by 290%. This study was done between June 2020 and February 2021. The second most effective bidding-war strategy – waiving the financing contingency. This improves homebuyers’ odds by 66%.
The data from Redfin show that waiving the inspection contingency and conducting a pre-inspection had no significant impact on whether a prospective buyer wins a bidding war. Those strategies are the most common, meaning most competitive buyers are doing that so you are not setting yourself apart from the pack.
Based on new data that came out this week, February New Home Sales fell 18% from January to an annual rate of 775k. That is below the expected 867k because of the lack of supply on the market. February Existing Home Sales fell 6.6% from January to an annual rate of 6.22M vs. 6.50M expected.
Freddie Mac says that confidence in the housing market is high as concerns about finances linger, in its March research report. This comes in the wake of a significant lack of inventory. Buyers are not only struggling to buy a home with all the competition but they are also struggling because there are no homes on the market. Causing competition to increase.
The COVID-19 pandemic forced lumber mills to close in 2020 due to health and safety concerns. Thus, builders and construction crews have been crippled with skyrocketing material costs. New builds have slowed significantly so homebuyers are typically looking at existing lots to buy.
Fed’s Barkin says economy is in fact getting stronger each month as we get to more vaccines rolled out and states opening up. Firming bond yields are a good thing. Retailers are already seeing things fly off the shelves because of stimulus checks. Things are looking up but we have a long way to go before its back to a buyer’s market.
There are many ways for you to sweeten your offer to win a bidding war. Everything from more cash, waiving contingencies, a fast close or a rent back for the sellers. Talk to us and your real estate agent to put the best offer forward.
