If you have been house hunting and submitting offers during the past few years, there is a good chance that you have encountered a competitive bidding war. Not surprisingly, all-cash offers were more than four times as likely to win a bidding war for homes in 2021. From a seller’s perspective, this is quite understandable as it removes much of the risk from the offer. In the South Florida market, we continue to see many home buyers relocating here from more expensive markets. This is therefore increasing the number of cash buyers competing in our market. Ultimately, all-cash offers appear to be 334% more effective in bidding wars when compared to other strategies.
Success rate of bidding war strategies
As expected, cash is and will continue to be king in bidding wars. Below we rank the relative success rates of various tactics for home buyers to consider:
- All-cash: 334%
- Waive financing contingency: 31%
- Pre-inspection: 25%
- Waive inspection contingency: insignificant
- Escalation clause: insignificant
More than 30% of U.S. homes sold above list price each month last year. Furthermore, this trend is continuing in 2022 and possibly even climbing as 43% of homes sold above their listing price in February 2022. Should the inventory of homes for sale increases throughout this year, we should see some relief for home buyers. Unfortunately, mortgage rates are also expected to increase gradually. With inflation at a 40-year high, fuel prices at all-time highs, & interest rates on the rise, this will greatly diminish the buying power of many Americans. If you are in the market to buy a home this year, it is important that you are fully prepared to act swiftly and make aggressive offers on properties of interest to you. A local & knowledgeable real estate agent should be able to guide you on what to expect in your local market.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!