You’re on the hunt for your dream home—and you find it.
You make an offer above the asking price, only to discover you’re up against another buyer (or more). While it may seem like a harsh term, you’re now in what’s called a “bidding war.”
Frustrating as it is, it’s very common nowadays. In fact, the more desirable the home and market conditions, the more common it is.
That said, there are concrete steps you can take to tilt a bidding war in your favor.
Let’s start by understanding what a bidding war is, then we’ll help you prepare for one. By the end of this blog article, you will sigh with relief—with less stress and more personal power to buy your dream home!
And remember, Quontic is here for you every step of the way on your homebuying journey.
What Is a Bidding War?
The term is pretty self-explanatory: when different parties are attempting to buy a home, the home goes to the winning bid, like an auction. However, it’s not always money that wins it (more about that later).
There are a variety of factors that cause bidding wars, and it can help to know what the major ones are:
- Strong economy: This and/or low mortgage rates motivate buyers.
- Low inventory: When there are more buyers than homes available, it creates a sense of scarcity.
- Location, location, location: When you think of a neighborhood you’d love to live in, it’s likely someone else is thinking of it too.
- Move-in ready: When a listing says this, get ready for a bidding war. While every home needs repairs or upgrades eventually, “move-in ready” suggests less investment up front.
- Strategic pricing: If a home price is listed under its market value, that may be on purpose to generate a lot of offers (however, make sure that’s really the case and not because there’s a problem with the house up for sale).
- Homebuying season: Late spring through early summer is the usual time people buy. You’ll encounter more competition during the months of February through June, peaking in May.
When these factors combine to favor the seller, it’s a “seller’s market”: a condition that creates a competitive housing market where bidding wars are more likely to occur.
We understand all this can feel a little stressful—so it’s time for some good news!
A Shift Toward a Buyer’s Market
In June 2025, only 28% of homes sold above their list price—down from 53% in June 2022. What a meaningful shift in your favor!
It reflects how the housing market’s been cooling since the pandemic, resulting in fewer bidding wars.
While things are looking more favorable for you (as of this writing), a bidding war is still possible, so let’s prepare you now.
Heading Into a Bidding War
It all starts with the offer you make on a home. There are several steps involved (including writing an offer letter), and your real estate agent can assist you.
Here we’ll focus on the elements of your offer that pertain to a bidding war, along with ways to stack the deck in your favor.
Before Making an Offer
You’ll want to do these things:
- Understand the overall market conditions. As mentioned above, the best way to anticipate a bidding war is to know what leads to one. At the very least, determine whether you’re in a buyer’s market or seller’s market.
- Get preapproved for a mortgage loan. This is critical. If you’re preapproved, you’ll receive a letter from a lender, indicating a) their intent to lend to you and b) your maximum loan amount and interest rate. You’ll need this to make a competitive offer.
Important note: “preapproved” and “prequalified” are different things. While some lenders use these terms interchangeably, you definitely want preapproval for making a bid (though prequalification has its place).
Preapproval involves a thorough inquiry into your financials, while prequalification is based on self-reported information (that results in a “general approval,” which isn’t much help in making a bid).
Also, you might be aware of the exhaustive documentation traditional lenders require of you.
If you’re at all concerned about this, we encourage you to check out a Lite Documentation Home Loan from Quontic. It’s specially designed for those who have a unique employment status. Plus, no tax returns or W2s are needed—and 100% gifts are allowed for down payments!
Anyway, once you have your preapproval—and all your paperwork together—you can…
During the Offer
Now you’re ready, but first things first:
- Set your budget. Be realistic about the maximum amount you can offer.
- Offer over the asking price if you can. If you need assistance in coming up with a competitive offer, consult your real estate agent. Make sure to stick to your budget.
- Include earnest money. To be competitive, you’ll want to pay some earnest money up front, i.e. a deposit that shows the seller you’re committed to buying. 1% to 3% of the home’s sale price is advised, though you may want to offer more if you can. If the sale goes through, you’ll get to keep your earnest money or apply it toward the overall cost.
Once your offer’s made, your real estate agent will get back to you, and you may discover that you’re in a bidding war with another potential buyer.
When the Bidding War Begins
Here are a few levers you can pull to help you have a winning bid.
Waive Contingencies
You may already know, but a contingency is a protection for you, the buyer. It’s basically an “if-then” statement that allows you to walk away if something goes wrong. Common ones include:
- Appraisal contingency: If the house is determined to be worth less than the sale price, you can renegotiate or leave the deal.
- Mortgage contingency: Even with a preapproval in hand, you technically don’t have a loan yet. If for any reason you’re denied a mortgage loan, this enables you to withdraw from the transaction and get back any money you put up.
- Inspection contingency: This grants you the right to have a professional inspection of the home done. If any serious issues are found, you can request that the buyer address them before proceeding with the sale.
There are other contingencies as well, and they’re worth exploring. However, the most important takeaway is this: waiving contingencies can help you win the bid, but it increases your risk. It makes your offer more attractive to the seller, but it can catch up with you later.
If you really want the home, work with your real estate agent to decide what contingencies you can risk waiving.
Include an Escalation Clause
This is an addendum to your offer that says you’ll beat any competing offer—up to a certain amount.
Here’s an example scenario of how that works:
- The home you want is listed at $400,000 while your budget is $450,000.
- You make an offer of $410,000 and include an escalation clause that says you’re willing to outbid any competing offer by $1,000 (up to $450,000).
- Sure enough, another party offers $415,000 for the home, and your escalation clause kicks in—automatically making your offer $416,000.
- The seller accepts your offer of $416,000—congratulations, you won the bidding war!
Finally, there’s another angle that can help you win…
Personalize It—and Don’t Take It Personally
As mentioned earlier, winning a bidding war is not just about the money you offer. The transaction is ultimately happening between human beings, so it’s more than operational; it’s also relational.
Here are some final tips on how you can win a bidding war using the power of relationships:
- Find an agent you connect with: It should be someone who inspires trust. Also, find someone who has a proven track record of winning bidding wars in the market you’re looking to buy in.
- Write the seller a letter: Often, you can ask to write a personal letter to the seller to create an emotional connection. Keep it concise, but mention things that would speak to someone’s heart. Talk about your journey toward homebuying and why this particular home is important to you and the life you want to have there.
- Maintain walkaway power: Don’t get too attached to any one house, because if you end up in a bidding war, you could lose. That’s just how it goes. Practice accepting that possibility ahead of time. And hey, if you don’t get the house, you still got a valuable experience!
Hang in there, and believe that your offer will be accepted for the house that’s right for you.
You Now Have an Edge—Especially With Quontic
With your knowledge of bidding wars and what to do about them, you’re ready to continue your homebuying journey.
And if you go with Quontic as your lender, it’s like having a knowledgeable friend at your side every step of the way.
We’d love to be your lender. Start by connecting with a Quontic Mortgage Specialist!