Boston condo bidding wars have become quite common, especially in hot markets like downtown Boston. While it’s normal to receive several offers on downtown Boston condos, it’s possible for the offers to get competitive and launch a bidding war. To many sellers, nothing sounds better than a bidding war on their home, but multiple offers could put you in a difficult situation: choosing which offer is the best. Here are some tips for handling a bidding war on your condo and how to choose the right offer.
Don’t Automatically Go with the Highest Offer
It’s easy to get excited when you see multiple offers coming in, especially when offers come with escalation clauses that allow buyers to increase their offer above the highest bidder up to their cap price. You want to get the most money possible for your condo, but you should have other considerations. Keep in mind the buyer probably needs to get financing for the offer and may not be approved if he or she got carried away in a bidding war. Your home’s value also needs to justify the higher price or the buyer will need to find a way to pay for the difference. If the loan falls through, you’re back to the beginning. The highest offer may also come with contingencies you aren’t comfortable with. A lower offer may be more attractive if it’s in cash, backed by a preapproval, or closes sooner.
Watch for Contingencies
When multiple bids come in, you may have several offers that are fairly close to each other, and you may even have an offer far exceeding the other bids. Instead of relying on the price alone, go over each offer carefully and consider any contingencies. Some buyers may be requesting stipulations that make the transaction more difficult or time-consuming to close. Requiring that the home appraises for a certain amount, the buyer secures financing, or the home receives a satisfactory inspection are all common contingencies, but there may be more. A buyer may add a contingency to the offer that his or her current home sells first before buying your condo. The fewer contingencies, the stronger the offer. If a buyer waives the home inspection, it shows he or she really wants the home, and it removes a major roadblock to closing.
Don’t Be Greedy
Being greedy is a common mistake condo sellers make in a bidding war, and it can backfire. Sometimes when bids are close, a seller will request a second round of bidding or even a third round, which can push buyers past their comfort level and make them tired of jumping through hoops trying to get the home. Pushing buyers too far can make them walk away out of frustration. Giving all parties the chance to make their best and final offer when you receive multiple bids shortens the process and gives everyone a fair chance to offer the highest they are willing to pay.
Avoid Bringing Emotion into the Deal
As bidding wars become more common, it has also become common for buyers to write letters to sellers explaining how much they love the home and why it would be perfect for them. These “love letters” are designed to endear you to the buyers and encourage you to accept their offer, even if it’s not the highest or strongest offer on the table. Consider selling your home as the financial transaction it is. The best thing to do is stay objective, judge every offer purely on its merits, and avoid receiving letters from buyers.
If you’re planning to list real estate for sale in downtown Boston don’t begin the process without enlisting the help of a trusted local agent. I can be reached at 617-595-3712
Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs
In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.
For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.
Charles River Park
Surrounding Communities of Boston
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.
Ford Realty Inc
137 Charles Street
Boston, Ma 02114
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