AgentIndustry Voices

Bidding War 101: 5 Strategies You Can Offer Homebuyers for Victory

Owning a home is the dream for many people; however, the road to achieving that dream is not always easy, especially when they’re involved in a bidding war. A bidding war is what happens when multiple buyers compete for the same property. Each offers a more attractive price in an effort to win the home, building, or business.


This war often happens rapidly, which leaves some buyers vulnerable to making rash investment decisions. A bidding war may occur when the market is hot, and when there is little inventory for buyers to choose from.

As a real estate agent, you must have the knowledge and experience needed to help your customers win a bidding war. You should know the market and give your customer the best advice on how to approach the bidding with a level head and a winning strategy.

If you want to help your customer win the house of their dreams, you’ll need to educate them on these strategies:

1. Raise your offer.

The easiest way to win a bidding war is to outbid the other buyers. If you can offer more than the selling price or the appraised amount, do so. Most homeowners or sellers want to make as much money as possible. For many buyers, they learn the hard way that there are buyers who are just as determined as they are to win the property.

You don’t need to add a ridiculous amount of money, but by bidding a few thousand dollars more than the asking price, you’re sure to get the seller’s attention.

2. Offer in cash.

If you want to win the home of your customer’s dreams, sometimes you have to offer cash. Making an offer in cash skips many hurdles that sellers would have to go through and signals to them that the buyers are willing to take the house as soon as possible. In addition, lenders will not give buyers more money than what the house is estimated for, leaving buyers to make up for the difference.

If the offer doesn’t need a mortgage, it will automatically be the safer bet for the seller.

3. Waive all contingencies.

Aside from all-cash offers, sellers also like buyers who have clean offers. A clean offer means that the buyer agrees to waive all contingencies.

A contingency refers to a stipulation in an offer that specifies that it will only close if specific conditions are met, such as the buyers house must sell before they can close on the new house. Waiving this requirement shows the seller that you plan to purchase the house regardless of what happens. The seller will consider your offer as a safe bet, because if it doesn’t push through, they get to keep the money as part of waiving the contingency.

4. Make a high earnest money deposit.

Earnest money is a good-faith gesture to show you’re serious about buying the house. The typical amount is 1% to 5% of the purchase price, but others can go as high as 10%.

The bigger the earnest money you offer, the higher the buyer’s chances are to win the desired property. Your buyer’s willingness to risk their money is one of the best ways to show the seller that they fully intend to purchase their home.

5. Include an escalation clause.

An escalation clause is an addendum to the offer that states the buyer is willing to go up a certain amount if another buyer matches their offer. The clause dictates that the buyer will raise their offer by a specific increment whenever another bid is made, up until the set limit.

Doing this shows the seller that the buyer is willing to put it all on the table and that they are indeed serious.  

What not to do? Include a personal note, otherwise known as a love letter.  According to the National Association of Realtors, “Seemingly harmless, these letters actually raise fair housing concerns, and could open real estate professionals and their clients to fair housing violations.”

Don’t give up on their dream home!

If your customer has found the home of their dreams but doesn’t want to risk losing it, they may be forced to implement some of the above strategies to get what they want. Bidding can be stressful and challenging to navigate.

Winning a bidding war takes strategy and luck on the part of the buyer to come out victorious. 

Rose is a licensed real estate broker and the co-founder of RE/MAX Gold Philippines, a real estate company in the Philippines. Acting and real estate have always been her passions since childhood. She confidently helps close record breaking deals for residential and commercial buyers while leading her team to success.