How to Avoid Being Outbid When Buying a Home in NYC

Being outbid when buying a home in NYC is very common. We'll discuss how to avoid being outbid in this video. Full blog post: https://www.hauseit.com/how-to-avoid-being-outbid-buying-home-nyc/

I’m Nick at Hauseit, based here in NYC. Check out https://hauseit.com to learn how to save money if you’re buying or selling real estate here in New York City. So let’s get started!

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Capitalize on first mover advantage

Be sure to have your offer documentation ready so that you’re in a position to submit an offer the moment a suitable listing hits the market.

There’s always an advantage to being the first offer (or one of the first few offers) that a seller receives. If your offer is submitted early on and it’s accepted, a seller is much more likely to stick with you even if similar offers come in before you’ve signed the contract.

If a higher offer comes in after yours is accepted but before you sign the contract, a seller is much more likely to give you the chance to match the other offer instead of pulling the plug altogether.

While having to raise your offer price after it was already accepted might be frustrating, just remember that you’re still in an advantageous position since you’re being given the chance to match and move forward with the deal, whereas bidders who came in late don’t have this same optionality.

Have realistic expectations

We’ll just come out and say it: it’s unreasonable to expect a seller to seriously consider a lowball offer during the first few weeks on the market. There is absolutely zero ‘first mover advantage’ to submitting a lowball offer in NYC, regardless of market conditions. This is particularly true if you’re considering a hot listing which is receiving lots of traffic from fellow purchasers.

Even if the property you’re considering isn’t a candidate for a frenzied bidding war, submitting a low offer on a brand new listing will likely offend a seller. Even if you subsequently raise your offer to a very competitive level, the seller will naturally be inclined to go with another buyer who didn’t previously offend them.

Put your best foot forward

How much of an advantage you’ll have by being a first mover ultimately depends on how competitive your offer price is. Don’t be afraid to submit a full-ask offer or even go above asking right away if you really want a property and the comps support the asking price.

If your initial offer truly ‘wows’ the seller, they’ll be much more likely to accept it quickly or engage in a negotiation which could yield an accepted offer quickly. This is beneficial to you as a buyer since a quick accepted offer will naturally curtail a seller’s desire to continue showing, entertain other offers or sit on your offer, and this will lower the risk of being outbid before you sign the purchase contract.

If on the other hand you submit a mediocre offer early on, a seller will feel compelled to sit on your offer and show to as many buyers as possible in the hopes of receiving better offers before countering yours. If your offer is too low, the seller might not counter at all.

Minimize contingencies

Having too many contingencies is the easiest way to lose out in a competitive bidding process. You have the best chance of yielding an accepted offer by submitting an all-cash offer or by submitting a financed offer which is non-contingent.

That being said, there is a way to make your mortgage contingency slightly more attractive to a seller. If you’re in a bidding war and you’ve agreed to waive the appraisal contingency subcomponent of the mortgage contingency, you’ll have a leg up compared to every other mortgage-contingent bidder.

Choose your real estate attorney wisely

The responsiveness of your real estate attorney can make or break your chances of securing a desirable property in NYC. The fact that an accepted offer is not binding in NYC means that every additional day a contract isn’t signed puts you at risk of being outbid. If your lawyer regularly clocks out at 3pm, doesn’t work on Fridays or takes days to respond during the contract negotiation, she or he might literally cost you your deal.

Submit multiple offers

Never rely on a single property when it comes to buying in NYC. Competition can be fierce, and a competing bidder can emerge even in the weakest of markets. Therefore, we recommend submitting multiple offers.

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Hauseit LLC, Licensed Real Estate Broker
Tel: (888) 494-8258 | https://www.hauseit.com
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