The Maui market is still going strong and prices continue to rise.  When properties of value hit the market, it is not uncommon for there to be multiple offers.  The listing agent will typically then go back to all potential buyers and ask for their highest and best offer.  Then the race is on and the bidding war begins!  I just went through this with a client and I thought you would appreciate some tips on how to get the edge in a bidding war. 

What Creates a Bidding War

Bidding wars are created when a property goes for sale that is a great price, a great value, in a highly desirable area or a combination of all three.  Price and value go hand in hand.  This is where comparable come in to play.  A low price may not mean a great value but a low price compared to other similar properties creates value.  Homes in foreclosure can be good buys because the price point is usually lower than homes sold in the more traditional way.  Bidding wars can also be all about geography.  Some areas here on Maui are highly desirable - it may be the proximity to a great beach or the best weather.  When properties in those areas rarely come for sale it can create quite a stir with many potential buyers interested just for the location.  Whatever the case, in a bidding war, you need to be able and ready to put your best offer forward if you really want to end up in the home. That best offer, though, is not necessarily all about the money.

Know The Seller

Find out, as best you can, what the seller is looking for in the offer they are going to accept. Your real estate agent can ask the listing agent whether the seller has a specific closing date in mind, wants an offer without certain contingencies, or has any other preferences you can cater to in your offer.  Price is always important but sometimes the small things can give you the edge.  Put yourself in the seller's position.  What would you like to see in an offer?

Make it Personal

Make your offer stand out by including a letter that briefly describes who you are and what you love about the home. Sellers have an emotional attachment to their home, and if you appeal to their emotions while putting in a competitive bid, you may win over similar offers.

Clean it Up

Other than price, sellers are looking for no hassles.  Give the seller a clean offer that assures them of a smooth transaction with no snags. You can do that by increasing the amount of your down payment or earnest money and getting pre-approved for a mortgage.  Better yet, offer all cash if you can.  Cash buyers are very desirable as it means no one has to wait for bank approval and/or delays.  Cash offers do not require an appraisal as financing offers do.  All of this can mean the turnaround time with a cash buyer from acceptance to closing is dramatically cut.  There are also ways to clean up your offer by removing contingencies.  Every contract contingency can be looked at as another hurdle to overcome to get to closing.  By removing contingencies, you are eliminating obstacles.  Your real estate agent can help you with which contingencies make sense to eliminate and which may be required.

Know When to Say When

A multiple offer situation can be very tricky.  It can be easy to get carried away by your emotional attachment to the home or your desire to win, but in the end, make sure you are willing to pay the price for the house. Be willing to walk away if the bids go beyond the amount you are willing to pay for the home.