This Is the Reason 40% of House-Hunters Haven't Purchased a Home Yet

by Maurie Backman | Updated July 19, 2021 - First published on March 1, 2021

Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
A couple looking at a home with a realtor.

Image source: Getty Images

These three tips could get you into a home sooner rather than later.

Buying a home in today's market is no easy feat. Record-low mortgage rates have led to a surge in buyer demand, and with limited inventory to choose from, getting an offer accepted often means having to duke it out with another buyer.

In fact, getting outbid on a property has kept a lot of prospective buyers from purchasing homes recently. About 40% say that's the primary reason they haven't managed to purchase property, according to a new survey by the National Association of Home Builders. By contrast, one year ago, only 19% of potential buyers cited getting outbid as their biggest impediment to homeownership.

If you're planning to buy a home in the near term, you may unfortunately wind up being flung into a bidding war, and you'll need a strategy in case that happens. Here are a few tactics you can employ to come out ahead when another buyer is vying for the same home you are.

1. Get pre-approved for a mortgage

Getting pre-approved for a mortgage doesn't guarantee that home loan will come through. But it does mean you've taken the step of providing a mortgage lender with your financial data, and that lender has determined that upon initial review, you're eligible to borrow a certain amount of money to finance a home.

When you send a pre-approval letter to a seller, you show that seller you're a serious buyer with the means to make good on your offer. All too often, real estate contracts fall through when buyers can't secure the mortgages they need to finance a home purchase, and that's a seller's nightmare. Having a pre-approval letter could therefore give you a serious edge in a bidding war -- and prompt a seller to say yes to your offer.

2. Be flexible with your closing date

The more you're able to cater to your seller's timeline with regard to a closing date, the more likely that seller will be to accept your offer over another. If your seller needs to delay your closing for a number of months, be amenable to that. To accommodate that, you may need to delay the sale of your current home or extend the lease on a home you rent. You may even need to relocate temporarily. But if you can be flexible on your closing date, your seller may value that more than a few extra thousand dollars.

3. Offer a higher purchase price from the start

Homes that are competitively priced often wind up in the middle of bidding wars. A good way to avoid one is to offer up an attractive purchase price in the first place. Say a home you want to buy is listed at $299,000. If you offer $299,000, you may find that another buyer comes along to outbid you. But if you offer that seller $309,000 or $314,000 from the get-go, the seller may be happy enough with that offer to accept it on the spot and not entertain other offers.

Getting pulled into a bidding war can be stressful, but it doesn't have to stop you from buying a home that otherwise suits your needs and budget. Take these steps to come out ahead in a bidding war -- or, better yet, avoid getting into one in the first place.

The Ascent's Best Mortgage Lender of 2022

Mortgage rates are on the rise — and fast. But they’re still relatively low by historical standards. So, if you want to take advantage of rates before they climb too high, you’ll want to find a lender who can help you secure the best rate possible.

That is where Better Mortgage comes in.

You can get pre-approved in as little as 3 minutes, with no hard credit check, and lock your rate at any time. Another plus? They don’t charge origination or lender fees (which can be as high as 2% of the loan amount for some lenders).

Read our free review

About the Author