How to Win a Bidding War on a House

Advice from a Real Estate Agent Fresh from the Trenches

By Joy Bowman, Lead Buyer’s Agent, Home with Sherry Team

Like it or not – and believe me, I don’t – multiple offers on a house are the norm today. As an agent who only works only with buyers, I experience their overwhelming frustration and disappointment firsthand on what seems like a daily basis.

There is no joy in calling a buyer to tell them their bid did not win. Again.

The good news is that there are strategies we can use together to increase the chances your offer will win in a multiple offer situation.

To begin with, you really must have an agent. I know! It sounds self-serving. The cold, hard truth is that most listing agents aren’t going to give an unrepresented buyer the time of day.

Why? Offers are contracts filled with legalese. Listing agents are too busy sifting through piles of offers and don’t have time to answer questions to help you with your offer. They also suspect getting through the inspection process and to the closing table with an unrepresented buyer is going to be more hassle than it is worth.

I can tell you this, too, buyers tend to get swept up in the competition and sometimes are willing to throw caution to the wind when they really shouldn’t. I, as your agent, have a fiduciary responsibility to you. My job is to stay focused on what’s best for you, even when you’re getting caught up in the emotion of it all.

That matters. You don’t want to end up overpaying for a home that doesn’t really meet your needs, in an area you won’t be happy in, and that requires more work than you realized.

So, what exactly does a winning offer look like?

The highest price wins, right? Not necessarily. While it is the first thing sellers will look at, there may be other factors they consider more or equally important. Let’s break it down.

The Breakdown

Closing Date – Do they want temporary occupancy? Do they want a quick close or do they need a couple of months? Your willingness to be flexible regarding the closing date and occupancy will make your offer stand out.

Earnest Money – This is the money you provide in good faith to show you’re serious about purchasing the home. In the past, one percent was standard here in Georgia. Today, two percent or more is typical. I’ll help you determine an attractive but reasonable amount.

Down Payment – Cash is king. Having a large sum of money available to use as a down payment or to cover an appraisal gap – more on this in a minute – makes your offer look strong in the eyes of the seller.

Waiving the Appraisal Contingency – If the bank appraisal comes in below the purchase price you’ve offered, you will have to cover the gap. It’s possible your lender may be willing to restructure your loan-to-value ratio. I work with a few good lenders and can help you find the best one for your circumstances.

Waiving the Inspection Contingency – I never suggest skipping an inspection altogether. You need to know what to expect regarding the condition of the home. However, when you’re competing against several other offers, waiving your right to renegotiate the terms of your original offer based on inspection results can bolster the strength of your offer. Don’t worry, you still have the right to terminate the contract and get your earnest money back if a material defect is discovered.

Waiving the Finance Contingency – You only want to do this if you have your financing in place and are confident you qualify for a loan in the amount of the purchase price you’re offering. If you end up not qualifying, you will forfeit your earnest money if you’ve waived this contingency. Again, I know several lenders and can help you find one to work with before we start your home search.

Escalation Clause – We can add a clause to your offer that indicates your willingness to increase your offer by a specific amount up to a maximum price. For example, let’s say your initial offer is $560,000. We might add a clause saying you will increase your purchase price in increments of $1,000 up to a maximum purchase price of $576,000. Some listing agents will not accept escalation clauses, instead preferring highest and best offers to be presented.

It’s a lot to consider, I know. To complicate things further, every home seller is different. What works in one situation may not work in another.

Experience Matters

I’ve been helping buyers for more than 20 years and this might just be the trickiest market for buyers I’ve witnessed. Don’t miss out on your chance to purchase a home. I’m ready to put my knowledge and experience to work for you. Let’s find your next home and put together a winning bid.

Joy has worked with everyone from first-time homebuyers to million-dollar-plus buyers across North Atlanta throughout her 20+ years in real estate. In that time, she’s seen just about everything you can imagine. At this point, nothing ruffles her feathers. Clients appreciate her unflappable nature, especially when deals get dicey. It keeps them coming back to her again and again. And they trust her enough to refer her to their friends, family, and coworkers, the absolute gold standard for any agent.

She joined Home with Sherry Team in 2010. She and her husband Paul call Alpharetta home. Interested in working with Joy? Give us a call at 678.744.8206.