Tips & AdviceWays to Win a Bidding War

Ways to Win a Bidding War


Buying a home is a tedious and personal endeavor. Whether purchasing your first home or buying for what feels like the umpteenth time, the process can rattle nerves and leave you worrying about the next steps.

In today’s market, with low housing supply and unprecedentedly strong demand, many buyers have to engage in bidding wars to secure their dream property. A bidding war occurs when more than one buyer places an offer, or bid, on the property. In this situation, only one buyer wins, and any other bidders will not secure the home they otherwise might have in a calmer market.

While a bidding war might frighten homebuyers, there is power in acquiring knowledge about the topic. Informed buyers can confidently enter the house bidding phase and potentially leave with the keys. Continue reading to learn more about how to win a house-bidding war.

Do your research

Perhaps the most essential part of the homebuying process, research allows you to enter the bidding process with an advantage. We recommend researching current market trends, both on a national scale and for the area where you want to purchase. Compile your critical findings in an accessible document to assess the price of the property you wish to buy.

When analyzing the price of the property you are interested in, you may consider the following questions:

  • Is the property overpriced or underpriced compared to other sales in the area?
  • How many properties are for sale in the neighborhood?
  • Are there similar properties for sale in the same area?
  • How many transactions were there in the neighborhood in the last 90 days? Is this higher or lower than the average sales rate?

If you enter a bidding war and submit a low price, the seller will likely not consider your offer. However, the definition of a too-low offer will change once the bidding begins, as you now must compete with other buyers who will also place a higher bid.

When entering this stage, it is essential to fall back on your research to ensure that what you offer is competitive for both the area you bid in and the fact that you are competing against other sellers. You may find that you bid more than you originally thought you would offer.

Get pre-approved for a mortgage

In all buying situations, you are a more attractive buyer when you get pre-approved for a mortgage. Getting pre-approved is different from getting pre-qualified, and it proves to the seller that you are ready and serious about buying. Pre-approval means that your potential mortgage lender has already pulled your information, including your credit score, to determine whether or not you could acquire the mortgage for a property. When you have that pre-approval letter, it becomes quicker to obtain the actual mortgage when needed.

Since pre-approval usually means faster closing and a smoother process, sellers generally want to work with someone who is already pre-approved. It becomes even more essential to have that pre-approval in a bidding war, as the seller may not even entertain a bid from a buyer who cannot swiftly move through the closing process.

Offer to pay cash

If you have the funds, submitting an all-cash offer strengthens your chance of winning the bidding war as it reinforces to the seller that you are easily able to move forward. When paying with all cash, you forgo the process of waiting for the mortgage, and sellers like to keep things moving. Should you decide to go this route, consider a few things.

Mortgage lenders require that you complete several components in the buying process, such as an inspection and appraisal. Paying with all cash means you will either decide not to complete these steps or work it into your bid to ensure it occurs. Without meeting these steps, you may be in for a surprise should the property have anything wrong with it. You also risk paying significantly above market value if there is nobody to appraise the home’s value. It is crucial to conduct research and consult with your agent to determine how much comparable homes in the area currently sell for. When you have that information, you will place a competitive bid.

Before entering the bidding war, you should know your budget and confidently stick by that to ensure you do not get swept up in the emotions of the process.

Start strong

House bidding wars differ from standard auction environments as you do not want to start too low, especially in today’s seller’s market. Many buyers, including first-time homebuyers and those who have not entered a bidding war prior, may feel inclined to submit a first bid that is below what they intentionally planned to offer. Under this mindset, buyers believe they allow themselves wiggle room should the other buyers come in low as well, and you could end up buying the home for a lower price.

This philosophy may run true in other scenarios, but a real estate bidding war begins because competition developed for the home. You enter a bidding war because too many buyers also want that property. To ensure the seller considers your offer, you should begin with a competitive bid. Your research and agent will advise you on the competitive bid amount.

Generally speaking, the most successful bidders are those who offer the most money. However, it is essential to note that you should plan how much money you are willing to go up to, as the heat of the bidding process may sway your emotions and convince you to go up higher than you originally wanted. If a property goes vastly above your budget during the process, then it may be time to move on. Acquiring your home will not be worth it should you not be able to afford to live there.

When determining how much to place a bid for, you should rely on your agent’s expertise. Your agent will remain up to date on current trends and provide you with their opinion. They will help on your first offer and continue to help if you move further in the negotiation process.

Submit an as-is offer

Submitting an as-is offer may make your bid more competitive as it removes several costly and potentially timely steps for the seller. An as-is offer means that you as the buyer agree to take the property in its current condition. When you acquire the property, you also accept the additional responsibility of tending to the maintenance and repairs that would typically fall on the seller during the buying process.

Should you decide to submit an as-is offer, you should be fully aware of the risk and feel confident that you can front the cost of any unexpected repairs.

Add an escalation clause to your offer

If you have room in your budget and want to increase your odds of winning the bidding war significantly, you may add an escalation clause to your offer. An escalation clause is an addendum to your bid, allowing your broker to increase the offer to a certain amount above the seller’s best offer. This clause proves effective, especially in a competitive market, ensuring you remain the highest bidder.

Of course, there is a substantial financial risk associated with this maneuver, as you cannot be sure of the amount you will end up paying. However, you can add boundaries to your clause, meaning the broker can offer a certain amount above the highest offer but not exceed your budget. Should no one submit a bid higher than your original bid, you will not owe the money included in your escalation clause.

Write a personal letter

The buying and selling of a home is a personal transaction. Many sellers feel connected to the house they lived in and may want to see it fall into good hands. From a buyer’s perspective, there may be something to gain from leaning into the personal nature of the process.

When you submit your bid, you can accompany it with a letter that expresses your sincere desire to acquire the property. You should include personal details to humanize yourself beyond the number associated with your bid. Discuss the aspects of the property you enjoy and why you want to make it your home. Finally, you can use the letter to justify any parts of your bid that may be unappealing to the sellers, like a lower offer.

Be easy to contact

Keep yourself available for the seller by providing your and your agent’s contact information, then allowing the seller to reach out with any questions. Should you receive an inquiry, respond as quickly as possible with detailed information.

Additionally, you can request that your agent regularly check in with the seller’s agent to ensure you are up to date on the process. Remember to stay patient and flexible, as the seller who receives multiple offers faces the tough decision on which to accept, and that can take some time.


House bidding wars may be a source of anxiety and frustration, but it does not need to overpower you in your home buying process. The above tips can help you secure your purchase without breaking the bank so you can walk away with your dream home.

Though this is a transaction, it is also a personal endeavor for both you and the seller, so put your best foot forward and focus on the aspects of the bidding war that you can control.

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