Things That Could Help You Win a Bidding War on a Home

<article class="post-281248 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-281248"><span class="entry-date">May 3, 2022</span><div class="entry-header center-block text-center"><h1 class="entry-title">Things That Could Help You Win a Bidding War on a Home</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Things+That+Could+Help+You+Win+a+Bidding+War+on+a+Home&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fthings-that-could-help-you-win-a-bidding-war-on-a-home%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p><img alt="Things That Could Help You Win a Bidding War on a Home | Simplifying The Market" class="webfeedsFeaturedVisual wp-post-image" decoding="async" link_thumbnail="" loading="lazy" sizes="auto, (max-width: 549px) 100vw, 549px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2022/04/28115925/20220503-KCM-Share-549×300.jpg" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2022/04/28115925/20220503-KCM-Share-549×300.jpg 549w, https://files.simplifyingthemarket.com/wp-content/uploads/2022/04/28115925/20220503-KCM-Share.jpg 750w" style="display: block; margin-bottom: 5px; clear:both;max-width: 100%;" width="358"/></p>
<p>With a limited number of <a href="https://www.simplifyingthemarket.com/2022/04/01/its-still-a-sellers-market-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">homes for sale</a> today and so many buyers looking to make a purchase before <a href="https://www.simplifyingthemarket.com/2022/04/20/how-to-approach-rising-mortgage-rates-as-a-buyer/?a=712984-fa409495d5d70154d03a25e81e9540e2">mortgage rates</a> rise further, <a href="https://www.simplifyingthemarket.com/2022/03/10/how-to-navigate-a-market-where-multiple-offers-is-the-new-normal/?a=712984-fa409495d5d70154d03a25e81e9540e2">bidding wars</a> are common. According to the <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-03-realtors-confidence-index-04-20-2022.pdf">latest report</a> from the <em>National Association of Realtors</em> (NAR), nationwide, homes are getting an average of 4.8 offers per sale. Here’s a look at how that breaks down state-by-state (<em>see map below</em>):<span id="more-46418"></span></p>
<p><a href="https://files.simplifyingthemarket.com/wp-content/uploads/2022/04/28115926/20220503-MEM-Eng-1.png"><img alt="Things That Could Help You Win a Bidding War on a Home | Simplifying The Market" class="aligncenter wp-image-46420" decoding="async" height="488" loading="lazy" sizes="auto, (max-width: 650px) 100vw, 650px" src="https://files.simplifyingthemarket.com/wp-content/uploads/2022/04/28115926/20220503-MEM-Eng-1.png" srcset="https://files.simplifyingthemarket.com/wp-content/uploads/2022/04/28115926/20220503-MEM-Eng-1.png 1000w, https://files.simplifyingthemarket.com/wp-content/uploads/2022/04/28115926/20220503-MEM-Eng-1-400×300.png 400w" width="650"/></a></p>
<p>The same report from NAR shows the average buyer made two offers before getting their third offer accepted. In this type of competitive <a href="https://www.simplifyingthemarket.com/2022/04/21/why-this-housing-market-is-not-a-bubble-ready-to-pop/?a=712984-fa409495d5d70154d03a25e81e9540e2">housing market</a>, it’s important to know what levers you can pull to help you beat the competition. While a real estate professional is your ultimate guide to presenting a strong offer, here are a few things you could consider.</p>
<h4><strong>Offering over Asking Price</strong></h4>
<p>When you think of sweetening the deal for sellers, the first thought you likely have is around the price of the home. In today’s housing market, it’s true more homes are selling for over <a href="https://www.simplifyingthemarket.com/2022/04/25/is-it-enough-to-offer-asking-price-in-todays-housing-market/?a=712984-fa409495d5d70154d03a25e81e9540e2">asking price</a> because there are more buyers than there are homes for sale. You just want to make sure your offer is still within your budget and realistic for the market value in your area – that’s where a local real estate professional can help you through the process. <em>Bankrate</em> <a href="https://www.bankrate.com/real-estate/what-is-a-bidding-war/">says</a>:</p>
<blockquote>
<p><em>“<strong>Simply put, being willing to pay more money than other buyers is one of the best ways to get your offer accepted.</strong> You may not have to increase it by a lot — it’ll depend on the area and other factors — so look to your real estate agent for guidance.”</em></p>
</blockquote>
<h4><strong>Putting Down a Bigger Earnest Money Deposit</strong></h4>
<p>You could also consider putting down a larger deposit up front. An <a href="https://www.simplifyingthemarket.com/2022/04/05/what-you-need-to-budget-for-when-buying-a-home/?a=712984-fa409495d5d70154d03a25e81e9540e2">earnest money deposit</a> is a check you write to go along with your offer. If your offer is accepted, this deposit is credited toward your home purchase. <em>NerdWallet</em> <a href="https://www.nerdwallet.com/article/mortgages/win-a-bidding-war-in-a-hot-market">explains</a> how it works:</p>
<blockquote>
<p><strong>“</strong><em>A typical earnest money deposit is 1% to 2% of the home’s purchase price, but the amount varies by location. <strong>A higher earnest money deposit may catch a seller’s attention in a hot housing market.”</strong></em></p>
</blockquote>
<p>That’s because it shows the seller you’re seriously interested in their house and have already set aside money that you’re ready to put toward the purchase. Talk to a professional to see if this is something you can do in your area.<strong> </strong></p>
<h4><strong>Making a Higher Down Payment</strong><strong> </strong></h4>
<p>Another option is increasing how much of a <a href="https://www.simplifyingthemarket.com/2022/01/03/how-much-do-you-need-for-your-down-payment/?a=712984-fa409495d5d70154d03a25e81e9540e2">down payment</a> you’re going to make. The benefit of a <a href="https://www.simplifyingthemarket.com/2021/09/22/is-a-20-down-payment-really-necessary-to-purchase-a-home/?a=712984-fa409495d5d70154d03a25e81e9540e2">higher down payment</a> is you won’t have to finance as much. This helps the seller feel like there’s less risk of the deal or the financing falling through. And if other buyers put less down, it could be what helps your offer stand out from the crowd.</p>
<h4><strong>Non-Financial Options To Make a Strong Offer</strong></h4>
<p><em>Realtor.com</em> <a href="https://www.realtor.com/advice/buy/multiple-offers-on-a-house/">points out</a> that while increasing these financial portions of the deal can help, they’re not your only options:</p>
<blockquote>
<p>“<em>. . . <strong>Price is not the only factor sellers weigh when they look at offers.</strong> The buyer’s terms and contingencies are also taken into account, as well as pre-approval letters, appraisal requirements, and the closing time the buyer is asking for.”</em></p>
</blockquote>
<p>When it’s time to make an offer, partner with a trusted professional. They have insight into what sellers are looking for in your local market and can give you expert advice on what levers you may or may not want to pull when it’s time to write an offer.</p>
<p>From a non-financial perspective, this can include things like flexible move-in dates or minimal contingencies (conditions you set that the seller must meet for the purchase to be finalized). For example, you could make an offer that’s not contingent on the sale of your current home. Just remember, <strong>there are </strong><strong>certain contingencies you don’t want to forego</strong>, like your <a href="https://www.simplifyingthemarket.com/2022/01/28/why-your-home-inspection-matters-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">home inspection</a>. Ultimately, the options you have can vary state-to-state, so it’s best to lean on an expert real estate professional for guidance.</p>
<h3><strong>Bottom Line</strong></h3>
<p>In today’s hot housing market, you need a partner who can serve as your guide, especially when it comes to making a strong offer. Let’s connect so you have a trusted resource and coach on how to make the strongest offer possible for your specific situation.</p>
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