Boston's Top 20

Register today!

Our mobile site is optimized for smaller screens.

TRY IT NO THANKS

Every City Has One

Custom Search

Boston luxury real estate

House Hunting? Here's How To Win a Bidding War.

How to win a bidding war when buying a home from CNBC.

Today's housing market is arguably one of the most competitive in history. A record low supply of listings, coupled with extraordinarily high demand from the largest generation, mean fast-rising home prices and more people going after the hottest properties. Bidding wars are now the rule, rather than the exception.

So how do you win a bidding war? Best to be prepared before you even begin your search and to carry equal amounts of patience and humor with you … if possible.

Decide on your absolute maximum price. This factors in the monthly payment on your mortgage (if you need one), property taxes, homeowners insurance, potential homeowner association or condominium fees, and a general estimate of monthly upkeep (lawn care, pool guy, unforeseen repairs). Then start looking for homes priced slightly less than that maximum. This gives you some wiggle room in the bidding war.

1. Come with cash. Not everyone can do this, but if you can make an all-cash offer, you will have an advantage. In certain very hot markets, investors are heavy, and they usually come with cash. Sellers don't want to deal with the possibility that your loan might not come through, or they may not want to wait the extra time for the mortgage processing, so they prefer cash. In some cases they may even cut the price a bit to get the cash. Coming with cash can actually double your chances of winning a bidding war, according to Redfin, a real estate brokerage. You can always take out a mortgage after the deal closes.

2. If you don't have all-cash, try waiving the financing contingency.That is when the deal is contingent on your loan being approved by the lender. Be careful though, you don't want to end up on the hook for cash if the loan doesn't come through, so get a fully underwritten loan pre-approved from your lender before submitting your offer. This could improve your chances of winning a war by 58 percent, according to Redfin.

3. Try a personal letter to the seller. I did this once myself, and it worked on a deal I never expected to win. Selling a home is just as emotional as buying one, especially for sellers who have lived in the home a long time and have raised their kids there. Sellers want to know a little about the people taking over their precious nest. If you're a young family, write about how you can see raising your children in the cozy family room and how you already envision them playing in the back yard. Write about how much you love the neighborhood and want to become an active part of it. DO NOT tell the seller if you plan to gut the home. That could gut the deal.

4. Finally, don't be afraid to walk away. The last thing you want to do is get over-emotional and overstretch your budget. Don't be house-poor. That defeats the whole purpose of the investment.

And remember, there will always, always be another perfect home.

Global Tumult Helps Keep Mortgage Rates Low

 Aaron Terrazas at Zillow Research

Mortgage rates fell over the past week to their lowest levels in a month and are now below where they stood at the end of February.

The week was a repeat of the familiar pattern we have seen repeatedly for the past few years: Just as macroeconomic fundamentals are poised to push rates higher, geopolitical fears seize the headlines, prompting a financial flight to safe assets and pushing mortgage rates downward.

Looking only at interest rates and not at the broader context, U.S. home shoppers have been indirect beneficiaries of a tumultuous world buffeted by fears of financial instability in China and Brexit over the past two years, and now fears of a global trade war. The decline in mortgage rates is all the more telling because it occurred the same week that the Federal Reserve increased short-term lending rates. After steepening somewhat during the first two months of 2018, the yield curve is again flattening.

Beyond ever-present (and difficult to predict) geopolitical risks, markets are likely to watch for inflation data due Thursday as well as speeches by two Federal Open Market Committee voters early next week. Markets will be closed for the Good Friday holiday, which could temper volatility, although borrowers should expect conservative pricing going into the long holiday weekend.