The housing market has reached a fever pitch with bidding wars breaking out in housing markets all across the nation. However, few neighborhoods are more contested than homes in Jersey City Heights. The Heights is a beloved neighborhood with a suburban feel nestled in the heart of Jersey City. Residents have a beautiful view of the downtown skyline while enjoying serene streets and beautiful homes in luxury condo buildings.
The moment a home appears on the market in the Heights, you can bet that somewhere between three and fifteen buyers are readying their bids. Within the first week, sellers are often fielding multiple offers and are challenged to choose the best. When buyers compete, this results in a multiple offer situation and maybe even a bidding war where two or more buyers drive the price up to see their bids accepted.
With so much competition, how can you win a multiple offer situation when buying in Jersey City Heights? Let's take a look at the winning strategy step by step.
What it takes to win a bidding war in Jersey City Heights
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Bid early and strong
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Bid significantly above listing
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Confirmed financial readiness
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Personal touch
Bidding wars in The Heights are intense and often involve several buyers at once. Your goal is for your bid to outstrip the others in mount, stability, and appeal. You don't always have to bid the highest amount; you might have the most reliable financing and a bid with appealing features like buyer concessions.
However, real estate is also extremely rapid when buyers are this eager. That means you need to be prepared to deliver a strong, well-designed bid quickly — almost as soon as a home appears on the market. The following steps will help you prepare and deliver that swift, winning bid.
Have your mortgage pre-approved and ready
Financial readiness is the first step to winning a multiple offer situation. Today, seller agents are advising their clients to outright reject any bid that is not backed by a pre-approved mortgage or a proven cash offer. This eliminates bids that are above the buyer's pay grade, reducing both competition and confusion.
Get pre-approved
Mortgage pre-approval is essential for winning a fast and competitive multi-offer scenario in Jersey City real estate. Getting your mortgage pre-approved means you have gone through the application process, been vetted, and activating your mortgage waits only on closing the right home purchase deal.
Go through any lender of your choice and have your mortgage pre-approved at your maximum budget, allowing you to work to bid to the highest possible point, should that become necessary.
Print a unique pre-approval letter for every bid
A mortgage pre-approval letter strengthens your bid, but you don't have to use the same letter for every house and bid. Have your lender print and send a unique pre-approval letter for every bid you make. This keeps your cards close to the chest on how much you can possibly pay so sellers and other buyers aren't tempted to push your financial limits.
Bid comfortably within your range
Your first bid for any home should be within a range where you can top a competing bid once or twice before you are out of margin space. Consider this when crafting your first bid for any house.
Get to the bidding war early
A home in The Heights will attract immediate attention, and you want your bid to be the first or among the first the seller receives. This gives you a chance to build rapport and ensure your bid doesn't disappear in the crowd of bids that will gather in the few days after a home reaches the market.
The question is: How can you bid quickly on a house that just hit the market? How do you know if the house is a good fit and has the features or floor plan you love? There are tricks to this technique.
Know what you want in a property
Photo courtesy of Nicolas Solerieu
Explore virtual tours of properties and attend open houses in the region. This will help you build a strong sense of what you want and do not want in a home. You may like cozy fireplaces and dislike tiny balconies. Or you may love excessive sunlight and dislike hanging pan racks. To identify what you want in a property, build four lists:
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Likes
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Dislikes
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Must-haves
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Deal breakers
Populate these lists with things you enjoy or don't enjoy in a house, essential features your family needs, and things you absolutely can't stand or couldn't work with. Compare each new house to your lists and priorities the moment it appears on the market. This will solidify your decision to bid or not to bid.
Decide swiftly and approach sellers after a listing appears
When a home listing goes up in The Heights, you only have a few hours to a few days to make a bid before the seller chooses an early bid and closes out. This is a break-neck pace so you must decide swiftly and reach out to the sellers. Either deliver your offer promptly or let the sellers know you are preparing a bid. This can cause sellers to wait for your bid before they make a decision.
Let sellers know you mean business
When you deliver your bid, let sellers know how much you want to buy the house. Be personable but direct. Sellers who feel you are motivated are more likely to give you a chance to win a multi-offer competition.
Bid high
How high a bid should you deliver? You don't want to underbid and lose the competition or massively overbid and spend more than you need to. Work with an experienced local real estate agent to help you estimate the value of the home, the competition, and how much above listing price to bid as a respectful and competitive offer.
Bid above listing price
Always bid above listing price. When a seller receives multiple offers, they will not play ball with anyone who lowballs and wants to haggle. In fact, most sellers see lowballing as an insult. So pick an amount comfortably above listing price, often between $10K and $50K for luxury real estate in Jersey City.
Add an escalation clause
An escalation clause defines in your first bid that you will automatically outbid any competing offers up to your budgetary limit. An escalation clause ensures you get a chance to outbid others without being rejected when higher competing bids come in. The escalation clause tells sellers to assume your bid is higher than others up to the maximum.
Know your absolute limits
Never enter a bidding war without hard limits. You know how much house you can afford, and driving up the price of one property isn't worth as much as a fair price on a different property later on. Never put your finances and future happiness at risk to win a bidding war.
Offer buyer concessions
Buyer concessions are negotiation terms where the buyer gives something to the seller that isn't the final selling price. While concessions are normally worked out during the negotiation phase (after a bid is accepted), you can pre-negotiate by offering a few concessions in your bid and offer. This informs sellers that your offer includes value beyond the raw selling price you are proposing.
Offer leaseback
Leaseback is when you give the sellers up to three weeks as your tenants to move out after you officially take control of the house. This is especially helpful to sellers who weren't ready for the rapid pace of selling and still need to move out or remove the last of their renovation supplies.
Offer greater escrow
Escrow is your earnest money — it goes down first into a protected account. If you duck on the purchase, the seller gets the earnest money, and if you complete the purchase, it goes toward your first payments of property tax and homeowner's insurance. Offer a larger escrow amount to assure the seller you don't plan to back out; if you eventually back out, the seller has more to gain.
Pay seller closing costs
In a typical home purchase, the seller pays an average of 6% closing costs which include the real estate agent's commission, while the buyer pays 6% closing costs in inspections and legal or administrative fees. The buyer can offer to pay a portion or all of the seller's closing costs to sweeten the deal and increase the seller's overall profits.
Waive contingencies
Contingencies are protections where the buyer can back out if certain criteria are met or not met. For example, the buyer can back out if the house fails a maintenance inspection. By waiving contingencies, you are saying you will buy the house despite any lingering flaws you may not know about.
Pay in cash
Paying for an entire home in cash has recently become popular as buyer competition becomes fiercer. Sellers like a bid that is financially backed so they know the lender will come through when negotiations are done. However, a cash offer is even more of a "sure thing" than a backed mortgage, and without the hassle of getting the money from the lender.
Only a few people have the savings to buy a home in The Heights outright, but if you do, your cash offer will pack more of a punch than a mortgage-backed offer of the same amount.
Build rapport with your seller
Connect with your seller. A seller comparing two similar bids is more likely to choose a likable person they can relate to. So be charming and personable in every meeting, polite in every message, and try to build a positive connection with a seller when you're serious about your home offer.
Write a personal letter
Write a letter about what you love about the house and why you would make the ideal new owner and resident. You might talk about how the windows remind you of your grandmother's house or how you've always dreamed of a condo more than ten floors off the ground. A personal letter does not only tell the seller who you are but also why they should choose your offer.
Be available and responsive
Be responsive. Answer emails within the day, answer phone calls and leave no questions unanswered. Be available in case a seller is trying to decide, or wants to inform you they've chosen your bid as the best.
Ask for an outbid opportunity
Lastly, ask your seller for an opportunity to outbid. Even with an escalation clause, sellers may still choose the bid with the biggest number. But if you personally ask for an opportunity to beat any deal they're considering, sellers will often think of you before reaching their final decision.
Winning a house in The Heights of Jersey City
Are you looking for a home in Jersey City Heights? This is a highly competitive market where you can expect to compete with many other buyers and offers. Fortunately, you have an experienced local real estate agent on your side. Contact the Sutherlin Group to discover a winning real estate strategy to find your perfect home in The Heights.