When Losing Is Winning
Sometimes in real estate, it's not the best news to learn you are the winning bidder. It simply means you were willing to pay the most money for a property, which could be greatly overvalued.
Losing out in a bidding war can be a good educational experience, allowing the buyer to step back and rethink their strategy for the next time. Rather than trying to beat everyone out on price, they may be able to have stronger terms, such as shortening timelines and waiving contingencies.
In other cases, it may be a wake-up call that the market is too hot and not the right time for the buyer to join the fray. There are always options. Buyers may consider searching in a different market which could prove to be a better investment. They could choose to rent until the market cools down a bit, or they could decide to stay put and explore home improvement projects.
In one recent negotiation, we lost a bidding war on behalf of our client because we had set our maximum price ahead of time and we stayed put. It was more of a financial purchase rather than an emotional purchase, so we were able to step back without being too disappointed in losing out. Turns out the winning bidder got cold feet, and the seller came back to us as the backup buyer. Seeing that we now had the upper hand, we were able to ultimately get the home and we negotiated a subsequent discount. In the end, the initial loss turned into a win for our client.