Tips and Traps When Negotiating Real Estate: How Do I Handle a Bidding War?

Walk Away a Winner – How Do I Handle a Bidding War?

In very hot markets it may turn out that even though you act as quickly as you can, other buyers arc doing the same thing. Thus, suddenly you find that there are multiple offers on the very property you want. If that happens, what should you do?

There’s an old Chinese adage that, goes something like, “Sometimes the only way to win is not to compete.” Consider pick­ing up your marbles and going elsewhere. In bidding wars, often it’s only the seller who wins. If you remember that there are always going to be other homes, you may find the strength to bow out gracefully and let others pay too much for the home.

On the other hand, if you’ve done your homework, you may realize that the real reason for the bidding war is that the home was underpriced to begin with. If that’s the case, you may want to continue with the negotiation, up to what you consider a fair price. If you have a sharp pencil, you might find that you can pay more than asking and still get the home for a good price.

Bidding Madness. Sometimes, however, a kind of bidding fever sets in that causes buyers to bid prices up beyond market value. This irrationality means that the “winner” ends up a loser with a house that costs more than he could turn around and sell it for. As I said, the best way to win here is not to compete.