How to win in a lake house bidding war.
1) Act quickly
Be ready to visit the listing as soon as it hits the market. If you can’t make it to the house, ask your agent to preview/Facetime with you. In many cases, houses are going under contract in less than 24 hours. Have your pre-qualification letter, proof of funds, be decisive and if you want it, make an offer that day!
2) Increase Option Fee and Earnest Money
Sellers want to know that the buyer has skin in the game. One way to show you are serious is to offer a large Option Fee and Earnest Money Deposit. We’ve won multiple offers by committing up to 50% of the purchase price as Earnest Money. Sellers understand that’s a lot of money to lose, and it means the buyer is unlikely to back out of the deal. Including a shorter option period along with the larger option fee is another thing sellers like to see. If your inspector uncovers something major or something you’re uncomfortable with, you’ll still have the opportunity to opt-out of the contract during your Option Period.
3) Make it easy for the Seller by Waiving Contingencies
Sellers typically prefer offers that have the fewest opportunities for the buyer to back out. If you’re fully approved by your lender and feel comfortable, you can waive your Loan Approval Contingency. Also consider waiving your appraisal contingency. This market is appreciating so quickly that appraisals don’t always meet the contract price, which is another reason sellers prefer cash offers.
4) Use a Cash Bridge Program to Make a Cash Offer
There are many creative financing options available to well-qualified buyers. You might not realize you can get it, but bridge loans are readily available. The most competitive offers are all cash, and a bridge loan will allow you to be more competitive, close fast, and then refinance into a permanent loan at favorable terms.
5) Work With an Experienced Lake Expert
Now, more than ever you need an experienced, full-time agent who knows the lake market and is able to guide you through the process of submitting a winning offer. There are unique aspects of buying waterfront homes. You’ll want an agent with the lake know-how to answer questions and get you through the buying process.