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How to Avoid a Real Estate Bidding War


Frequently, a homebuyer’s worst nightmare is a real estate bidding war. For investors, getting the best deal on a property is essential to achieve a healthy profit. Unfortunately, sometimes it’s unavoidable that more than one person is interested in the same property. However, there are a few ways you can avoid a real estate bidding war. Keep reading as we go over a few tips to avoid a bidding war and smoothly purchase a property. 

What is a Real Estate Bidding War?

A bidding war occurs when more than one person is interested in purchasing a property. A bidding war is different from having multiple offers because it involves a series of increasing prices. It’s similar to an auction, where potential buyers rapidly push up the property’s price, often past the original value. 

Bidding wars often happen when buyers are looking at a home, a building, or a business in a desirable location or during a thriving seller’s market. 

During a bidding war, potential buyers are typically under stress and are more vulnerable to impulsive or emotional investment decisions. Because of this, most people try to avoid real estate bidding wars altogether. That said, how can you avoid this situation? Let’s go over a few ways buyers can bypass a real estate bidding war.

Can You Avoid a Real Estate Bidding War?

It may seem like a bidding war is inevitable with some desirable properties. However, there are ways for potential buyers to increase their chances of winning a bidding war right off the bat. First, going into the situation with a confident, clear mind is crucial so you don’t make irrational emotional decisions. 

Second, there are several helpful tips for potential buyers who don’t want to get caught up in a bidding war. Let’s discuss eight ways you can avoid a real estate bidding war. 


  1. Make the Highest Offer
  2. Ensure You’re Prequalified for a Mortgage
  3. Insert an Escalation Clause
  4. Make an All-Cash Offer
  5. Eliminate Contingencies
  6. Remain Flexible With a Closing Date
  7. Work With a Good Real Estate Agent
  8. Write a Personal Letter to the Seller

Make the Highest Offer

One of the best ways to avoid a bidding war and secure a property right away is by making the highest offer. Even though the seller likely won’t accept the first offer, money talks. 

That said, don’t act too impulsively and forget about your budget. The last thing you want to do is overpay for a property if you don’t have to. Bidding wars can sometimes involve emotion, but remember that you will eventually find a property that fits your needs. 

Get Pre-approved for a Mortgage


Another way to secure your spot in a home purchase is by proving that you are pre-approved for a mortgage loan. Sellers are more likely to accept an offer from a pre-approved prospective buyer. 

However, keep in mind that pre-approved and prequalified aren’t the same. Prequalified is simply an estimate of a loan amount based on verbal income details. On the other hand, a pre-approval letter gives a precise mortgage amount based on more official documents, like your W2s, credit score, and bank statements.

Insert an Escalation Clause

Consider implementing an escalation clause if you want to make a high offer on a home but don’t want to overpay for the property. Escalation clauses are beneficial during a bidding war because they allow you to raise your offer if another buyer places a higher bid. 

For example, say you make an offer for $150,000, but you’re not sure how much a competitor will offer for the property. In this case, your real estate agent can insert an escalation clause that says you’ll pay a certain amount above any offer, as long as it doesn’t surpass your budget. 

Make an All-Cash Offer


All-cash offers are highly desirable to sellers. If you don’t need to apply for a mortgage loan, the seller will likely prioritize your offer. That said, it’s unlikely for buyers to have the cash available to purchase a home outright. However, it’s a great way to avoid a real estate bidding war. 

Additionally, if you buy a property with cash, you may be able to use delayed financing to help regain some of your money. Delayed financing is a way to get a mortgage after you’ve paid for a property using cash. 

Eliminate Contingencies

Sellers don’t want their homes sitting on the market for extended periods of time. Additionally, nobody wants to re-list their home because a contingency caused the sale to fall through. Thus, buyers can make more substantial offers by eliminating contingencies. 

A contingency clause in a purchase agreement specifies specific requirements or actions that must be met before the sale goes through. For example, if you’re buying a home, you may have a contingency in your offer letter that states:

“If the property has defects upon inspection and the seller decides not to fix the issues raised by the buyer, the buyer may terminate the contract, and the seller may place the home back on the market.”

Remain Flexible With a Closing Date

Staying flexible with the closing date and other details of the home sale is another great way to avoid a real estate bidding war. Not everyone will be patient or flexible, so if you give the seller time to fix repairs and close the deal when they’re ready, they may be more willing to sell to you. 

Being flexible doesn’t always work, especially if you’re on a tight deadline. However, if you’re not in any rush, being flexible with a closing date is sometimes just as enticing as a higher offer. Therefore, consider being patient and giving the seller time to close on their terms. 

Work With a Good Real Estate Agent

Working with an experienced real estate agent can be incredibly helpful to avoid a bidding war. Most real estate agents have the experience and skills needed to navigate a bidding war successfully. Additionally, they know the housing market and can help you determine the home’s fair market value you want to buy. 

Most prospective buyers tend to get competitive and emotional during a bidding war. Having a real estate agent by your side can help you stay grounded so you can feel confident that your offers don’t exceed the home’s value. 

Write a Personal Letter to the Seller

Finally, sellers typically like selling to people who will enjoy their home just as much as they did. If you write them a personal letter letting them know how much you admire their home and why you want to purchase it, you could leave a lasting impression. 

Including small details about the property that you love or introducing yourself in depth can help you align with the seller’s feelings. If you show that you see genuine value in the home and will appreciate it just as they did, they may be more willing to sell to you. 

When Is It Time to Walk Away From a Bidding War?


Sometimes, a real estate bidding war is unavoidable. However, you can always walk away from a bidding war even if you want the home. But, when do you know it’s time to do so? 

If you don’t want to get caught up in a bidding war, you don’t have to. Especially if the home isn’t your dream home or a good investment. 

If you aren’t entirely in love with the home, it’s most likely not worth going against other buyers to try and win an offer. Additionally, if the home is priced higher than other similar homes in the neighborhood, it’s a sign that you should walk away before getting involved in a bidding war. 

Finally, if you are up against multiple buyers, navigating a competitive bidding war can be incredibly stressful. If you find yourself in an unfavorable buying situation, it’s essential to know when to walk away. 

Managing Your Investment Property

For investors, winning a real estate bidding war is just the beginning. In fact, successfully operating a profitable rental property business requires a lot of work and time spent away from chasing the new big deal. This is why successful landlords hire a Richmond property management company to ensure their investment is well managed. An experienced property manager will understand your local market as well as local laws to keep you in compliance and making money.

Our team of experienced industry professionals understands the unique challenges owners face. We provide full-service rental management that allows owners peace of mind knowing someone is looking out for their best interests. If you own rental property throughout Baltimore, Philadelphia, Northern Virginia, Washington DC, or other surrounding counties, give us a call today to learn more.