Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
NYC’s real estate market is one of the most competitive in the world for home buyers. For example, you think you have found your dream home on StreetEasy, and you went to the open house to get informed that you are competing with three other potential buyers. How to win a real estate bidding war on homes in NYC? Do not worry. NestApple is here to help! We are giving you strategies that will give you an edge on how to win real estate bidding wars.
The term “comps” is short for comparable sales. Ensure NestApple runs comps to justify the value of the home you are hoping to buy and evaluate that relative to the asking price. First, compare coops to coops and condos to condos, and it would help if you made an informed decision.
Indeed, as with any investment, you want a clear strategy to ensure you do not let your emotions get the better. Remember: buying an apartment is a business deal!
By the time you are making an offer, you probably have a good idea of your budget. However, when encountering a bidding war, NYC buyers may easily get carried away by their desire to win and lose sight of the bigger picture. Then, draw a line in the sand with your budget so you do not overextend yourself.
Don’t compare yourself to others. Your budget, needs, and requirements are yours and should be the only criteria to consider.
There are plenty of homes in NYC, and there will be other opportunities. You always want to avoid a bidding war: if there’s a bidding war, it means someone is overpaying. You don’t want to be that someone.
Also, price is not the only aspect to consider when preparing your offer. Non-financial terms are a great way to make your request stand out. This may include timing, flexibility on the target closing date, and a short-term leaseback option.
Some sellers are motivated by terms; for sellers that want to sell their apartment but have not lined up their relocation, offering a short-term leaseback can remove a lot of stress during the home sale process. For instance, some sellers might prioritize flexibility with timing over a higher price.
Whether you have strong ties to a community, are a first-time buyer, or are experiencing a life event, telling your story can help create a personal bond with the seller. Writing a heartfelt personal offer letter about yourself and what buying that property means may position you favorably.
You should specify what you love about the house and personal connections.
Lastly, getting a commission rebate can provide additional buying power relative to your competition. If you buy a $2 million home with a 6% commission, your buyer commission rebate totals 2% of the purchase price.
Therefore, that’s a savings of $40,000 that you can use to increase your buying power. In other words, this is an extra $40,000 you can use to win a bidding war on a house.
Now you have enough tools to win a bidding war in New York City.