Tips for Winning a Bidding War on a House

Have you ever wanted a house which you’ve always dreamt of but other people have their eyes too on the same home? You might have experienced this more than once in your life. It’s mainly the bidding war that gets intimidating when you are sure of having the house of your dream, but the price keeps on increasing, leaving you outpaced.

Bidding wars are inevitable when there is huge competition for one property. Homebuyers go all out to win the battle by offering higher prices than the other bidder. In case you have been losing out on bids over and over again, then you might want to take some tips from experts that will help you win a bidding war for your dream house.

Here are some helpful tips to help you win a bidding war on the house you want.

Be Prepared For It

If you want that house more than anything else, then be prepared to bid over the house’s market price. It doesn’t necessarily mean that you have to offer double the market price, but your offer will get accepted if you’re ready to pay a couple of hundred dollars more than the market price. It is because it’s difficult for owners to find serious buyers who are ready to bid over market value.

Make A Higher Offer

Outbid the entire competition offer a higher price for the house. If you are sure that no one can come up with better terms than the ones you are offering, make your offer unbeatable. It will surely make the owner prefer your offer over other lowball offers they’ve been getting until now.

If you are not ready to pay a couple of hundred dollars more, there is no point in bidding for it. If you want the house, then pay the price.

Even if your offer is good enough to be accepted but not the highest, the seller can choose to negotiate with another bidder.

Be Prepared For A Counteroffer

The seller or his realtor will most likely counter your offer. If you want your offer to be accepted, be prepared to act according to their terms and conditions. Negotiating the terms of the agreement is another way to seal the deal.

If you are so desperate to have the house, do whatever it takes. Once they know that you are interested in buying their property, they will be ready to give you a reasonable price. If the offer isn’t countered, you can call the realtor and ask for a counteroffer.

If you aren’t accepting their terms, it will again be thrown back to you or your realtor.

Have Your Pre-Approval Letter Ready To Go

As soon as you know the house of your dreams is up for sale, have a pre-approval letter from your lender. A pre-approval letter shows that you are a serious buyer and ready to buy a house at market value. This way, you will appear a better option to realtors showing the exact property because if they lose the deal on this property, they think you will be buying another house soon.

Sellers always prefer serious buyers who are ready to buy at market value. A pre-approval letter gives you the leverage to act quickly when the opportunity comes knocking at your door.

Make An Offer With No Contingencies

Make a strong offer by removing contingencies, if you have any. This way, your offer will be taken seriously, and the possibility of getting rejected is very less.

Be ready to remove home inspection contingencies, or else your offer can always get rejected because buyers do not want to lose out on their earnest money deposit if they back out from the deal after inspection.

If you have been losing out on bids, then these tips to win a bidding war for your dream house might work in your favor. However, if the property is not so important for you and you don’t want it bad enough, then maybe a counteroffer or an appeal will get rejected quickly.

Show Some Cash

Showing money has many advantages. First of all, it shows that you are serious about buying a home. Second, it shows your intention of closing the deal at the soonest possible time. Sometimes, you have to show some hard cash while writing your offer if you want the house.

Lastly, if you have cash ready on hand, there is no need to wait for funds or a loan from a lender. This will also speed up the process and, in return, give you a better chance of having your offer accepted.

The seller will be assured that you are a good buyer and have the money to buy their house. You can read our article on tips to save money for your home.

Waive The Home Inspection Contingency If Necessary

If you have been losing out on bids because of the inspection contingency, then waive it from your offer. But if you don’t make any inspection, your offer may get rejected. This depends on the situation, so better take proper advice from your realtor or lender before making an offer that gets rejected. This way, even a lowball offer will get accepted, and if your house fails the inspection, then you can always back out from the deal.

Even if you have lost out on bids because of the inspection contingency, the house of your dreams might still be up for sale. You can plan a visit and put in an offer just before it gets sold to another buyer, which will most likely get rejected.

Using An Escalation Clause

Your offer will help you to have the house at a lower price. The clause allows the buyer to match the highest bid but, in return, keep their earnest money deposit. This can give you an edge over other buyers who might lose out on the deal because of too much competition.

Keep in mind that this is only useful when bidding for a property that has received other offers.

Write Your Seller A Letter

Writing a letter to the seller is something that might turn the odds in your favor. Why not pamper them with compliments and persuade them to sell the house to you? This way, your offer can get priority over other offers.

You may also win the deal because you are willing to pay more than the highest bidder, who might easily get distracted by other market deals.

This is best done when your offer gets rejected and you want to try it. Make changes to your offer or write a letter showing how much you need their property.

Using An Agent Who Holds Power To Sell

This might sound strange, but it is true. If an agent has the authority to sell the property, then you can always use his services to make your offer more desirable. When there are multiple agents for one property, some will be more instrumental in getting your offer accepted because they can sell their client’s house rather than just finding a buyer.

If you think this option will work for you, then find an agent with the power to sell and use his services to get your offer accepted quickly.

Agents who have the authority to sell don’t deal with a few particular clients or deals all the time. They might be more approachable than other agents, which might work in your favor.

The Market Is A Factor

Sometimes sellers have a reason for selling their home, which goes beyond money and the offer. If there are other houses on the market, you might have difficulty getting your offer accepted even if it is perfect. This means that your offer will have to be good to beat the competition.

If you want to win a bidding war, then it can be done if you plan your offers well and present them in a way that gets accepted quickly. Using the right tactics will help you get the house at a much lower price than market value.

Be Flexible On The Closing Date

Sellers always prefer a flexible closing date, so be ready to change it and put in an offer. Even if you don’t have enough time to close the deal, just let your realtor know that you will do anything possible to move the process along quickly.

If you lose out on this house because of not having a flexible closing date, then keep in mind that many houses are out there for sale. There is no harm putting in an offer just before losing it because you might also get lucky and get the house!

These tips will help you win a bidding war if you want to buy a house. If your heart truly lies with the house of your dreams, then do whatever it takes to get there!

Don’t Lowball – You Could End Up Losing The House Altogether

Be prepared to negotiate – if your offer is rejected, don’t be afraid to ask the realtor if they consider a counteroffer! If you manage to buy the house of your dreams, remember that there are always things you can do to get the best price possible.

Remember, even if you don’t buy your dream house right away, there are still hundreds of homes out there for sale! Keep looking and remember these tips to win a bidding war on houses so that when it comes time for you to buy your home, you will be prepared.

Talk Strategy With Your Realtor

Before you go for a bidding war, understand what strategy is best for you to outbid the market. Discuss with your realtor and formulate a plan to win the bidding war.

Tell your realtor to find out the price range of the houses that are similar to yours. If there is a house that has just been put on the market and you want it, then ask your realtor for a strategy to win and what you can do to get people interested in seeing your house over others.

This will help you to understand the market and how you can win a bidding war. You need to have a plan of action ready before you go ahead so that even if your offer is rejected, there should be a backup one waiting for you.

If you are outbid, don’t be afraid to up your offer by a few thousand dollars or even more if you feel it’s the right thing to do. After all, this is your dream house and if your realtor recommends an increased bid, then trust him!

Also See: How to buy a Foreclosed Home | Tips to buy a house from Seller’s Market

Conclusion

If you want to win a bidding war on the house of your dreams, then these tips should help. They’ll give you an idea of how to get more serious buyers and better offers from sellers while also helping you negotiate for the best price possible aftermarket. Remember that even if you don’t buy your dream house right away, there are still plenty out there! Keep looking and remember these tips so when it comes time for you to buy your home, you will be prepared.

FAQ’s

What is a bidding war? 

A bidding war occurs when more than one person offers the same price for a home, and both of the offers are accepted. This creates an escalating effect, where people continue to bid on homes to win them.

What should you do if you don’t win a bidding war? 

If you lose out on the house, keep looking for other homes! Even if you haven’t found the house of your dreams yet, don’t give up because there are still plenty out there! Remember that many listings are within your budget, so there is no reason to get discouraged. Also, keep in mind that you can always bid on other homes, even by changing your closing date.

Where should you look for houses? 

You should look around at local listings and check out your realtor’s website for homes that he has available. You can also look online at mega-listing sites, which have a lot of listings from realtors and people who are selling their own homes.

What should you do during a bidding war? 

You should remain confident and be ready to up your offer if your realtor recommends it. Keep in mind that even if your bid is rejected, there’s always room for negotiation and talk with the seller and realtor about raising your offer or closing date.

When should you bid? 

It would be best if you planned with your realtor in terms of when to place a bid on a house. Talk about if it is best for you to wait or if you should place a bid immediately after seeing the house preview. Remember, you can always up to your bid if it is rejected.

There are hundreds of listings out there, so keep searching, have a strategy in mind with your realtor, and remember to be excited if the deal goes through! So remember these tips when you are going for a bidding war on the house of your dreams! Keep looking, and don’t give up just because you didn’t win a few bids or got outbid in a couple of auctions.

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Written by


Rostislav Shetman is the founder of 9Kilo Moving. He has been in the moving and relocation industry for more than 25 years, making him an expert in his field. Rostislav started as a helper, dispatcher and driver and has worked his way up to owning his own company. He takes great pride in his work and enjoys helping people relocate across the United States of America. When he's not working, Rostislav enjoys spending time with his family and friends. They are the light of his life and bring him happiness every day.