Listing your property in a seller’s market like recent history in Boulder, Colorado can seem like an ideal situation, but if you aren’t prepared for buyer demand, it can become overwhelming. Before learning about what steps to take when navigating a bidding war on your Boulder real estate, here’s a look into the local real estate market.
Boulder is one of the best places to live in Colorado and is highly ranked across the U.S. With its scenic views of the Rocky Mountains and surrounding nature providing abundant opportunities for year-round recreation, it makes sense that buyers are interested in the area. Boulder properties have high appreciation rates, are in low supply, and don’t last long on the market, all of which benefit sellers. With this in mind, here’s how to handle a bidding war.
Ask for professional advice
To avoid any mistakes, partner with a real estate agent and ask for their advice. Agents have seen and navigated through more bidding wars than you have as a seller and will know what to consider when managing multiple offers. They can answer questions you have about buyers or which offer is the best and expertly navigate through high-stress situations. In areas like Boulder, where the market is likely to remain in sellers’ favor for a while, having the expertise of an agent is extremely valuable.
Additionally, a licensed agent is always going to put your best interests at the forefront. The advice and assistance you ask for are geared toward selecting the best offer for your situation. They’ll update you and other buyers’ agents on the bidding war process and keep an objective stance when cooperating with others and handling counteroffers.
When sorting through offers, work with your agent to research the buyers interested in your property. It is possible that a buyer interested in a desirable property like Boulder luxury condos may overbid, to improve their chances of getting noticed. Check if buyers have a mortgage pre-approval and not just a mortgage pre-qualification, as the latter doesn’t provide information about a buyer’s credit or income.
Also, check if the buyer’s proof of funds comes from reputable sources to ensure they’re able to follow through on the offer. Check their debt-to-income ratio, as well as other factors not related to their financial status. They may be flexible on the timeline for closing, require contingencies that make the transaction more complicated or add perks like an escalation clause or personal letter.
Think beyond the offer price
Although an offer price for your Boulder real estate should be at least the listing price, the number on the proposal isn’t the only factor to consider. Properties in Boulder have a median list price of $1.1 million, and areas in Boulder, like Fort Collins and Estes Park, are experiencing an increase in sales. It’s important to keep these pressures in mind when selling your property and considering each offer you receive.
A buyer may add contingencies into their offer related to their current home’s sale or a home inspection. However, when competition is high, and a seller has multiple options, a buyer can forgoe contingencies. When they do so, it’s usually an indication of their level of interest in your property. Additionally, buyers can add escalation clauses, which benefits you as a seller. This means that their offer price will increase by increments as higher competing offers are made on the property.
Consider cash offers
Cash offers can be extremely valuable to you as a seller, even if it isn’t the highest offer available. Offering all cash means there are fewer potential obstacles for you to worry about coming from a lender. Although buyers using loans are much more common, cash offers result in a quick sale and less trouble with the appraisal process.
Keep backup options open
When you’ve selected the best offer, keep your backup options open. You never know why or when a buyer may back out of a deal, but not keeping in contact with other buyers if this happens can make the selling process longer and more difficult than it needs to be. If a buyer is financing with a loan, the loan agreement may not go through. A buyer may also have buyer’s remorse once they’re out of the heat of competition.
Keep backup buyers informed by sending them updates on your current offer’s standing and progress. This will make it easier for you to contact buyers if the offer does fall through. Additionally, it lets buyers know they’re still in the running, which decreases their chances of them searching for or offering on other properties like Boulder luxury condos. They may also come back with even stronger proposals now that they have a second chance.
Brace for a home appraisal
When selling your home in a competitive market, consider getting a home appraisal before listing to eliminate any potential obstacles later in the process. The median home value may fluctuate based on your home’s size, condition, and location. If your home appraisal isn’t where you want it to be, or you want to ignite competition, complete home repairs and consider upgrades that appeal to buyers. Outdoor additions like a deck or patio with a mountain range view may perk buyer interest.
If you don’t get a home appraisal before listing your home and a bidding war occurs, a low appraisal can complicate the process for buyers. The home value impacts how much a buyer can lend, and if they make a high offer but don’t have the funds to back it, they may need to renegotiate the price or back out of the offer.
Ready to navigate a bidding war?
Navigating a bidding war can be complicated, especially if you’re unfamiliar with the factors at play. If you’re ready to sell your Boulder real estate and need help navigating the real estate market, contact trusted local agent Patrick Westfall to guide you through the process.