Four Times More Likely

According to a report from Redfin, prospective homebuyers who offered cash payments were more than four times as likely to win a bidding war as those who didn’t in 2021, currently making all-cash offers the most effective strategy to secure a home with multiple offers. Waiving the financing contingency and conducting a pre-inspection, both of which help a deal close faster, are also effective strategies. Homebuyers who used those strategies were 31% and 25% more likely to win than those who didn’t—although some experts say escalation clauses and waiving the inspection contingency won’t increase potential homebuyers’ chances of winning a bidding war.

Effective bidding-war strategies are essential for homebuyers in today’s unprecedented market, with a limited number of homes for sale making each one highly valued. More than half of Redfin offers faced competition each month of 2021, and competition has intensified, with January marking the most competitive month on record. Agents have also reported that it’s common to put in offers above the asking price, encouraging buyers to start their home search listed below their price range. Many buyers are also waiving the appraisal contingency, meaning the buyer commits to paying the agreed-upon price, even if the appraisal comes in lower. While Redfin’s data doesn’t track this strategy, it has become increasingly common in recent years, according to Redfin agents.

Source: DS News