If you are buying a home at the height of seller's market or simply want a sought-after house in a neighborhood with limited units for sale, you may find yourself in the midst of a real estate bidding war.Competing against faceless prospective buyers may bring out the warrior in you, but before you decide to go all out in your battle, LelongTips.com advises you to step back and decide how much you really want that particular home.
Should You Compete in a Bidding War?
In the thick of competition you may forget your end goal is a home you love and can afford to own. If you saw that competing bidders are raising hands on bidding, then you may feel pushed to make an aggressive bid during the auction.
You should stop yourself from competing just because you think the time is right to become a homeowner or to move up into a new place. Instead, think about whether you really want the particular house enough to fight for it.
To guard against making an emotion-fueled offer for a house, take a hard look at your finances. While it may feel good at first to beat out other buyers and to purchase a property in an auction, it won't feel so great in a year or two when you are struggling to make the payments on a house beyond your means. It's even worse if the banks value the property lower that its sold price, resulting you to fork out more cash in advance. Know your limits before you begin to bid.
Prepare for Auction Battle
Your first step before entering an auction, a.k.a. bidding war should be to consult with a bank/lender to understand the maximum amount you can borrow, to evaluate how much cash you have to spend while keeping enough money in a reserve fund.
Next, make sure you engage with property auction advisor at LelongTips.com, who can share information about local market conditions and communicate with the auction property owner/bank. If you need help, you should seek advice about how to handle a bidding war, but be sure to do your own research: visit and inspect the property a few times at different hours to get a 'feel' about the property and its surrounding area.
Bidding Auction Strategies
LelongTips.com auction advisors are able to provide you a bid indication value based on the market price survey which shows comparative market analysis of similar homes, nearest transaction price records, outstanding bills report (whether absorbed by bank/owner), and other significant knowledge and experiences gained from auctions.
In a bidding war, it's important to stick to your predefined budget unless you are prepared to settle with the extra budget and still emotionally under control!
Below are some points you should read even if you are an experienced bidder:
* Solid financing: Banks are tightening their loan financings. As you may be competing against cash buyers, so make sure your loan pre-approval is in place and you have completed all required documentation other than identifying a specific property.
* Check on titles: Caveats, title restrictions, land use permissions are among the information that you could get from title search checking. This service is provided to our LelongTips-VIP at special discounted rate.
* To pay all outstanding bills in advanced: Most auction banks absorb certain outstanding bills up to auction date, in a way of reimbursements. This means you have to pay relevant bodies in advance before you can claim back from the auction bank.
* Limit your bid according to budget: When all aspects ie. location, future development, potential risks, rental yield are taken into consideration, it's time to set your budget and bid within your budget.
For more personalized advices and assistance, call our Hotline:
1700-81-6988 (within Malaysia)
+6012-361-3988 (outside Malaysia).
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