Ways to Win a Bidding War

Posted September 11th, 2018

Perhaps you have gone through this. Perhaps you have not.

After months of searching and viewing properties, you finally found your dream house – large windows, hardwood floors, renovated kitchen, a big lawn – it has almost everything you’ve ever dreamed of having. Just as when you are about to make an offer, your broker tells you that other buyers are also eyeing the property and a bidding war is inevitable….

In today’s red-hot housing market, bidding wars are the rule. With limited housing supply and rising demand from buyers and investors alike, buying has become harder and harder. Especially for first-time homebuyers, the term “bidding wars” might sound scary. But trust us when we say that the idea of not being able to own your dream home is a lot more terrifying.
So how do you win a bidding war? While there is no one single method that would work in all scenarios, we at RealtyHop have listed some of the most common tactics you might find useful.
1. Do your research

If we have to conclude homebuying in one word, that would be “research” – you research before you start searching, during your search, and after you have closed a deal on the property. Before making your bid, do some research and get yourself familiar with the local market. Some key things you want to figure out include

  • Is the property overpriced or underpriced?
  • How many properties are for sale in the neighborhood?
  • How many transactions are there in the past 90 days?

The effort you put in will help you get to know the local real estate market and make a bid that hits the sweet spot.

2. Be pre-approved for a mortgage

You are more attractive to the seller if you are pre-approved for a mortgage. Why? The last thing a seller wants is to wait for the mortgage to be processed, and so by getting pre-approved, you not only tell them that you are serious about buying this property, but you also show them you have the ability to close right away. Most of the time the seller will go with someone who is already pre-approved because that always means cha-ching!

3. Offer to pay cash

Indeed, not everyone has millions of cash on hand. But if you can make an all-cash offer, you have the advantage. The logic is very similar to what we mentioned in #1. Sellers do not want to wait another day for you to get your loan. Nor are they interested in taking the risks if your loan does not go through. Therefore, if you can, offer to pay cash. Plus, in a market full of private investors, offering to pay cash is a good way to level the playing field.

4. Come out of the gate with your best offer if you are in a robust real estate market

Many people, especially first-time homebuyers, tend to bid low in order to create a wider zone of possible agreements (ZOPA) and thus bring down the final price. Sadly, that does not always work if you are in a competitive market. The seller might not take you seriously if you bid too low. If you are anticipating a bidding war, the best strategy is to make your offer the best offer. Remember, in a bidding war, your enemies are other buyers who are also interested in the property.

5. Submit an as-is offer

For those who are unfamiliar with real estate, to make an as-is offer means that you as the buyer agrees to take the property in the condition it is in on the date you make the offer. How does an as-in offer help you win the bidding war? An as-in offer saves the seller time and money. Once the contract is executed, the seller can move on with no strings attached. No more repairs, no more maintenance. Sounds pretty amazing, doesn’t it?

6. Build a personal relationship with the seller

Selling a home is just as emotional as buying. Put it this way, most people want to see the place they once called home in good hands (unless they only bought the property for investment purposes, but even then, personal connection still works), and so instead of treating it like a simple real estate deal, focus on the person, not just the property. You can either start the relationship since the day you meet the seller or write the seller a nice letter explaining why you like the house when you make an offer.

7. Add an escalation clause to your offer

An escalation clause, by definition, is an addendum to a real estate offer that allows your broker to increase the offer to a certain amount above the best offers the seller has received. An escalation clause can be very effective in a blistering real estate market, as you are almost always going to be the highest bidder. Be sure, however, to evaluate the risks, the condition of the house, as well as other buyers’ buying power. You’d also want to make sure you and your family can afford the extra money.


Winning a bidding war is not easy, but it is not impossible. At the end of the day, it is all negotiation, and negotiation is about the people, not the property. Put yourself in the seller’s shoes and find out what s/he cares about the most and do your best to save him/her time and money.


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