Things are getting exciting! You’re ready to put a bid in on a new apartment. How do you decide how much to offer? The market moves fast and is crowded. You don’t want to offer too little and miss out. And you don’t want to offer too much and lose some cash.
Tips & Tricks
- Timing is key. Your broker is going to be your insider guide.They’re going to find out what the buzz is about the unit and how much interest there is. There could easily be a few other buyers in the game.
- In other parts of the country, especially places where there are lots of sprawling properties available, bidding a bit under the asking price may pan out. But in NYC, sellers can easily be inundated with offers. We’re talking 10 or 20+ offers.
- Enter the fray with a plan. Here are some starting points.
Play Detective: Research
- Before you start crushing on a new apartment…
- Research the building.
- Research the neighborhood.
- Attend open houses. If they’re hoppin’, the unit is most likely a hot ticket and be prepared to get in to a bidding war if your heart is set on that unit.
Get Thee Preapproved
- Preapproval for a mortgage is just what it sounds like—a letter from the lender letting you know how much you qualify to borrow based on their guidelines. The lender will look into your credit history and income. A preapproval is good for 60 to 90 days and is something that you can easily have tucked into a folder with all of your other home-buying info so that you’re always prepared in case you fall in love with ‘the one.’
- Having this in place when you enter a bid is essential. It’s going to give you an edge as it proves that you’re absolutely ready to buy—you’re able to secure financing and are committed.
Make Your Deal Sweeter Than The Rest
- The goal is to make your bid the most desirable out of the bunch. How to set yourself apart from the crowd? Make it a sweet, sweet deal.
- Offer a down payment that’s a few percentage points higher than the requirement. Even a slight edge can help!
- You could also waive contingencies like the mortgage contingency. This is some risky business. The mortgage contingency means that the buyer has a set period of time to secure financing to purchase the property and—if financing can’t be secured—the buyer can back out and retain their down payment. By waiving this contingency, if the buyer can’t secure financing—they will lose their down payment.
The Personal Touch: Writing a Letter
- Who doesn’t love a thoughtfully written letter or note? Writing a letter to the seller can shine a spotlight on you and your bid. Share a bit about how you can see the apartment being your new home and what that means to you. Keep it honest, polite, and gracious. Your sincerity and time spent making a connection this way can help you beat out other offers that are similar to yours.
Know Your Budget & Stick To It
- You’ve done your research, you’ve got your preapproval. Perhaps you’ve been in a few bidding wars by now and they haven’t ended in victory. Remind yourself of what your budget is.
- It’s easy to get swept up in a bidding frenzy and start offering more money than you can really comfortably afford. Stay steadfast! Respect the budget and future you will thank you.