6 Expert Tips for Winning a Bidding War in NYC
It’s no surprise that NYC real estate is one of the most competitive markets in the world, particularly for homebuyers. It happens all the time – you think you’ve found your dream home only to be informed that you’re in competition with other buyers. This may seem daunting, but not to worry.
Below, the team from Prevu Real Estate highlights the key things you need to know to give yourself an advantage during a bidding war in NYC.
How to win a bidding war in NYC
- Operate within your budget
- Evaluate comparable sales
- Be flexible with non-financial terms
- Personalize your offer with a letter
- Benefit from a commission rebate
- Buy all cash, take a mortgage later
Operate within your budget
By the time you’re making an offer, you probably have a good idea of your budget. However, when encountering a bidding war NYC buyers can sometimes easily get carried away by their desire to win and lose sight of the bigger picture. Draw a line in the sand with your budget so that you don’t overextend yourself financially. There are plenty of homes in NYC. There will be other opportunities.
Evaluate comparable sales
Make sure your buyer's agent runs comps to justify the approximate value of the condo or co-op you are hoping to buy and evaluate that relative to the asking price for the apartment. It is important that you make an informed decision. As with any investment, you want to have a clear, well-research strategy to ensure you don’t let your emotions get the better of you during a negotiation.
Be flexible with non-financial terms
Price and value are not the only points to consider when preparing your offer. Non-financial terms are a great way to make your offer stand out without having to dig deeper in to your pocket. A few examples of non-financial terms include timing of possession, flexibility on target closing date, and the option for a short-term lease-back. For sellers that want to sell their apartment but haven’t lined up their relocation, offering a short-term lease back can remove a lot of stress during the home sale process. In some cases, you will find that sellers prioritize flexibility with timing over a higher price.
Personalize your offer with a letter
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 connection with the seller. Writing a heartfelt personal offer letter about yourself and what buying that property means to you can position you favorably in a bidding war.
Benefit from a commission rebate
Receiving a commission rebate can provide additional buying power relative to your competition. At Prevu, we are a technology-driven, full-service brokerage in NYC, passes a significant rebate along to our customers. With Prevu’s Smart Buyer™ Rebate, you receive a commission rebate up to half of the commission Prevu receives for representing you as a buyer's broker. For example, if you buy a $2 million condo or co-op with a 6% commission (3% paid to seller’s broker and 3% to the buyer’s broker), your buyer commission rebate totals 1.5% of the purchase price. That’s a savings of $30,000 that you can use to help offset your closing costs or increase your buying power.
Buy all cash, take a mortgage later
Being an all-cash buyer allows you to seem like the better, safer option for a seller looking for a smooth transaction. If you are fortunate to have enough liquid assets sitting around to purchase the apartment all cash, its is not uncommon for wealthy buyers to purchase the property all cash and take out a mortgage after closing. This is sometimes referred to as delayed financing or a cash-out refinancing.
For those buyers that are in the financial position to pursue such a strategy, it is best to speak to your mortgage professional and accountant to understand how much you'd be approved for in a delayed financing as well as any timing requirements to complete such a financing after closing.
Interested in buying an apartment in NYC? Browse listings and see how much you can save with Prevu's Smart Buyer Rebate.
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