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Winning A Bidding War As A First-Time Buyer
Given the current state of the property market in Ireland, winning a bidding war as a first-time buyer might feel like an impossible task. However, with mortgage approvals for this cohort rising to a record level of 30,508 for the year, up to the end of October 2023, it would appear that triumph is very much within grasp in the race towards “sale agreed”.
The key to success lies in understanding the process and preparing adequately, as well as seeking early guidance from a qualified advisor or mortgage broker. These are the two crucial steps that can significantly improve a buyer’s chances of securing their first home.
Key strategies for winning a bidding war
First things first – what is a bidding war?
A bidding war arises when several buyers are vying for the same property, often pushing the price above the initial asking amount. This has become increasingly common in Ireland, where there are more buyers than available properties. Success in a bidding war hinges on a few critical strategies:
Strategy #1: Prepare financially for your home purchase
Putting in the financial groundwork is crucial. This means getting a clear picture of your budget, saving for a deposit, and being aware of the hidden extra costs that come with buying a house. Also, the earlier you engage the service of a mortgage broker in the process, the better prepared you will be – so get your finances, and your professional support, lined up and ready to go.
Strategy #2: Get Approval in Principle
An Approval in Principle (AIP) is a preliminary loan application made before purchasing a property. An AIP serves as an indication from a lender regarding the amount they are willing to lend based on the details you provide. The lender assesses your creditworthiness and establishes the approximate value of the home loan they may approve in principle. Obtaining an AIP provides insight into potential mortgage approval and offers an estimate of your borrowing capacity. Having an AIP in place not only shows that you’re a serious contender but it also clarifies your budget and shows you’re ready to proceed, giving you an edge in the bidding process.
Strategy #3: Present a higher offer
To bring a swift end to a prolonged and seemingly endless bidding contest filled with minor incremental offers, significantly increasing your bid can prove effective. However, it is vital not to exceed your budget and overextend yourself financially. Know when to admit defeat, step back and wait for the next opportunity.
Additional smart bidding tactics for first-time buyers
Beyond the aforementioned strategies, the following tactics can also help you stand out:
Select an odd number for your “final offer”
When placing a final offer, consider an odd-numbered bid. This tactic often appears as though you’ve pooled all available resources to make your offer, signalling a strong desire and commitment to the property.
Flexibility with dates
Being able to adjust to the seller’s timeline can make your offer more attractive than a higher bid from someone with rigid requirements.
Try a personal angle
Sellers often have an emotional attachment to their home and appreciate knowing it will be cherished by the next owner. A personal letter to the seller, detailing the connection you feel to the home and how it fits into your future, can help to identify you as the person behind the bid, enabling you to make a more meaningful connection.
Navigating negotiations with sellers
Once it appears that your offer is being seriously considered, it’s time to double down for the negotiation process. Effective negotiation is about finding what the seller wants besides a good price. Whether they’re looking for a quick sale, a stress-free process, or the best offer, tailoring your approach to meet these desires can make your bid more even appealing.
The role of a financial advisor in winning a bidding war
With so much on the line for first-time buyers desperately trying to seal the deal on their new home, a bidding war can understandably be a source of stress and anxiety. For this reason, it helps to have the calm expertise of a financial advisor on your side, steering you through the process and providing invaluable advice.
Leveraging expert advice for winning a bidding war
A financial advisor’s role is crucial in making sense of the property market’s complexities. Guiding first-time buyers on everything from choosing the right mortgage to budgeting and bidding strategies, their advice can simplify the buying process, helping you make decisions with confidence.
Winning a bidding war is possible with help from Symmetry Financial Management
At Symmetry Financial Management, we’re here to offer the support and mortgage advice you need to move forward confidently in the event of a bidding war. Our team is dedicated to helping you understand your finances and the intricacies of the property market, ensuring you’re well-prepared to secure your first home.
Facing a bidding war as a first-time buyer might seem overwhelming, but with careful preparation and the right support, you can come out on top – and with keys in hand! As winners of the Brokers Ireland Expert Mortgage Broker Award 2023, we know a thing or two about navigating the mortgage and property purchase process. We’re here to assist you through every step of the process, from financial preparation to making your winning bid.
Contact us today to find out how we can help you achieve your homeownership goals.
If you’d like a free, no-obligation consultation for your mortgage, pension or financial needs, get in touch here, call us on 01 6831673 or email us directly on info@symmetryfinancial.ie.
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