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Bidding Wars: Fighting to Find a Family Home

For many, buying a house is the American dream, but these days, snagging a suitable home has turned into an all-out war in some places, with victory often going to the highest bidder.

Experts say housing prices have been steadily increasing and are likely to continue to rise. All the while, interest rates have remained low and new home construction has been lagging, creating a limited supply of available homes. This combination has stirred up a nightmare scenario for many homebuyers and a dream come true for sellers.

"It's a tough market to be buying in," said New York real estate guru Barbara Corcoran. "Every buyer's uncomfortable. If you're an aggressive buyer, it's the kind of market that brings the fangs out. If you're an insecure buyer, it's the kind of market that's going to scare the crap out of you."

"Nightline Prime" followed a few couples who were fighting for their dream home, only to be outbid many times over. But real estate experts say there are some things buyers can do to give themselves a competitive edge, such as including a short letter about yourself in your offer application to the seller.

Real estate agents from Redfin, a national real estate brokerage, put together a "do's" and "don'ts" list of what potential homebuyers should write in a cover letter when putting an offer on a home.

Below are Redfin's tips-

DO

-State your offer terms, including price, close date and your lender's name. Listing agents know which local lenders can get the job done in time.

-Be honest about your personal situation and why and how you are buying a home now. If you've been saving up since you were a little kid, say so!

-Get to know the sellers - include details about what you have in common.

-Be creative. If you can't offer a higher price say what you can do to sweeten the deal..

-Make it perfect. Check for typos, spelling and grammatical errors.

DON'T

-Tell your entire life story.

-Mention the drastic renovations you're planning to make.

-Copy and paste the same letter for different offers. Sellers can tell!

-Try to justify your offer price. Leave that to your agent.

-Mention offers and homes you have lost, as it could be seen as a sign of weakness.

Source:
ByABC News Nightline
May 2014

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