Just when you thought it was over:
- Deciding on an agent,
- Learning areas and neighborhoods,
- Learning new terminology like functional obsolescence,
- The unexpected revisit of your five-year plan,
- Hugs and hate with your mate,
- Unfolding and folding maps,
- Burning untold gas and rubber,
- Walking through strange homes (some stranger than others!), and
- Finally finding “the one” — or at least one you both agree on,
Somebody else wants the home you’ve made an offer on!
Most people underestimate the skill set they’ll develop during the homebuying journey. One of the final—and probably most important—skills you’ll need is how to win a bidding war.
Price of the House
The danger, even if you win, is that the price could be pushed above the home’s actual value. Not the end of the world if you love the house, but it could jeopardize loan approval and cost you more than expected. There are smarter tactics than simply reacting with higher offers. Think eBay—similar rules apply, with a few key differences that can work to your advantage.
1. Find a nice agent!
Most people choose agents based on immediate needs, without realizing this person will represent them through the entire process. For residential deals, pick a personable, experienced agent—someone skilled in negotiation. Ask them to share a few success stories. That’s a strong start.
2. Get pre-approved!
This is not the same as a pre-qualification letter. A pre-approval—especially from a reputable lender—adds serious weight to your offer. A letter from “Bank of America” will likely carry more influence than one from “Bob’s Mortgages.” In a tight race, that credibility can make a huge difference.
3. Don’t bluff!
In a bidding war, you can’t afford empty threats or ultimatums. If you claim you’re at your limit, stick to it. Backtracking damages your credibility and gives the seller reason to take another offer more seriously. Maintaining your integrity also helps ensure a smoother contract-to-closing phase.
4. Know your stuff!
Know the home’s value range, any necessary repairs, and how emotionally attached you are. Keep looking at other homes during the bidding process. You might realize this isn’t the one after all—or that you’re more willing to fight for it.
The better informed you are, the longer you can steer negotiations away from just price. Sellers care about net proceeds and the likelihood of the deal actually closing. Your qualifications matter just as much as your offer.
5. Offer a big deposit!
Let’s say your competition offers slightly more. Rather than escalate, stay firm on price but increase your earnest money by $5,000–$10,000 (depending on the home’s value). This shows you’re serious without inflating the price. You may even get some of that money back at closing. It’s a powerful move that shows financial strength.
6. Offer to close sooner!
Like boosting your deposit, this demonstrates readiness and reliability. Instead of letting someone less qualified run up the price, use preemptive strategies like this. Just keep in mind: some sellers may prefer a later close. That brings us to the next point…
7. Ask!
Simply ask: “Is there anything other than a higher price that would make you choose us?”
They may need a longer close, extra time to move, or want to keep a plant or furniture piece. These details matter. However—never, ever agree to let them stay in the house after closing. And have a contingency plan in case they leave behind that boat or car.
8. Educate!
If the seller seems focused only on price, bring up the appraisal limits. Mention your qualifications. They may not realize that a deal can fall apart if the appraisal comes in low and the buyer isn’t paying in all cash. Your pre-approval, flexibility, and strong deposit can help counter a higher offer that’s not actually viable.
Even if someone offers 50% over asking, the deal could collapse when the lender refuses the loan. Unless your competition is paying in full or has a giant down payment, this can be your edge.
9. Get personal!
Appeal to emotion. If there’s a chance to meet the seller (like at an open house or inspection), have your whole family there. Discuss strategy with your agent first, then try to connect. Shared interests—even something small, like both owning a Pekingese—can work in your favor.
10. Expose your enemy!
Politely suggest that the seller compare all offers based on qualifications. Your pre-approval, deposit, and clean terms could expose your competitor as underprepared. If that happens, you might once again become the only serious offer on the table. Win by default? Even better.
11. Keep it friendly!
Yes, it’s possible—and smart—to negotiate with kindness. Sellers who’ve loved their home often want to pass it on to “good people.” Investors may not care, but private sellers often do.
Meanwhile, your competitor might try to devalue the home with harsh criticism—usually a mistake. Stay respectful. Praise the home. Point out that while you love it, market value and repairs must be considered. You’re being honest, not rude.
12. Walk away!
If the bidding gets out of control, it’s okay to walk. If the seller gets greedy, they might end up stuck in a frustrating, drawn-out process with an unqualified buyer. Walking away can save you time, money, and stress.
The best way to get over losing a house is to find another one quickly. Any real estate agent—or marriage counselor—would agree.
Win well!
Your goal isn’t just to win—it’s to win well. Overpaying can feel like losing in disguise. With these strategies, you may not only win the bidding war but avoid it entirely by being prepared, persuasive, and professional. Now that’s a real victory.
