Across New York City, the real estate market isn’t slowing down. In 2021, buyers signed a record number of Manhattan contracts, and the Upper West Side real estate is a particularly hot seller's market. In such a competitive market, buyers frequently find themselves in a bidding war with other interested parties. And while this means it can be frustrating to negotiate for homes for sale in Chelsea or other Manhattan neighborhoods, it does not mean that your New York dream home is out of reach.
To secure the ideal piece of Upper West Side real estate, check out the following tips for navigating a Manhattan bidding war.
Show a seller you’re ready to buy
It may be difficult to avoid a bidding war in Manhattan's current real estate market, but there are ways to lower your chances of competing with other attractive offers. Knowing which neighborhood and home style you're looking for is an essential first step. Let's say you're interested in homes for sale in Chelsea—a wise neighborhood to invest in, as it's ranked in the top three New York City neighborhoods. You’ll want to watch the market and make an offer as soon as a seller lists a home in the area. Not only should you make your offer as quickly as possible, but make it at least 5% above the asking price. At this point in the process, you should know exactly how much you're willing to pay for a home and can adjust your offer accordingly. If money is no object, ask the agent if you can submit a request that is a percentage higher than the highest bid the seller has received.
It's a good idea to get pre-approved for a mortgage before making an offer, which will speed up the sale process. The pre-approval process typically takes a few days to complete, and without a pre-approval letter, many real estate agents will not consider your offer. However, if you were to make an all-cash offer on a home, a pre-approval would not be necessary.
Make a cash offer
Making an all-cash offer on a home will likely put you at the top of a seller's list. With a cash offer, you’ll avoid a mortgage contingency, meaning sellers will not have to give you a timeframe to secure finances for the home. According to a recent study, buyers that made a cash offer were four times more likely to win bidding wars. Making a cash offer means proving your available income. For example, if you're interested in homes for sale in Chelsea, you should be prepared to pay an average sale price of $2 million, a 71% increase from the previous year.
The highest offer on a home is not always the bid the seller chooses. Often an all-cash offer will win over a non-cash offer, even if it’s slightly lower. Of course, an all-cash proposal well over the asking price will no doubt put your name at the top of a seller’s list of potential buyers.
Stay up to date and be flexible
A seller isn't just interested in the amount you offer; they want to know how flexible a buyer can be as well. Sudden changes are likely during a bidding war, and it's essential to go with the flow. Stay in contact with the listing agent and ask for updates on the sale. Although the agent will likely not provide too much information on other offers, they might give you ideas on how to stay competitive in the bidding war. Some potential buyers might contact the broker once or twice daily for updates.
Some sellers ask buyers for a quick closing, speeding up the process so that they can move on with the next phase of their lives. Others might not have secured their following living arrangement and would prefer to stay in their home for a set amount of time after closing. Some buyers will even "rent" the house back to the seller until they’re ready to move out. Flexibility is critical if you're trying to win a Manhattan bidding war.
Grab the attention of the seller by waiving contingencies in your offer. A home buying contingency is a condition that the seller and buyer must meet for sale to close. Sellers are often interested in buyers willing to waive common contingencies. Waiving other contingencies, like a home inspection and appraisal, will take some burden off of the seller and make your offer stand out.
Add a personal touch
Sellers want to know that the person buying their home is excited about the opportunity. Many people have an emotional attachment to their home and want to know that the subsequent owners will love it as much as they do. Because of this, potential buyers will often write a letter to the seller detailing why they love the home. For example, you might explain that the neighborhood is good for families and has an above-average school system. Writing a letter, or even sending pictures and flowers, can make a world of difference.
Searching for Manhattan luxury real estate?
If you’re interested in living in Manhattan, reach out to one of the trusted agents on The Catalyst Team for expert assistance. The Catalyst Team has over three decades of combined real estate experience in NYC and offers each client the best resources and expertise available. Contact The Catalyst Team today if you’re ready to view Manhattan luxury homes for sale.
