Responding to a Bidding War

by Kathy Dulhagen 08/11/2019

You and your agent search for weeks to find the perfect home and suddenly, there it is on the market. It’s in the highly sought-after neighborhood of your dreams and, amazingly, the asking price is in your sweet spot. You and your agent follow tried and true negotiation tactics only to learn that the seller has multiple offers to consider. Entering a bidding war to get your dream home creates all kinds of complexities. Having the right professional to help you navigate the process may mean the difference in winning the war or not.

Know your agent’s limitations

If your agent has never participated in a bidding war, ask him to seek advice from a knowledgeable colleague or his lead broker. Entering negotiations blind will not help you, but you and your agent can learn from the process with some expert guidance.

Know your financial limitations

The frenzy of a bidding war and your competitive nature to win may push you to increase your bid outside the range that’s comfortable for your budget. The thrill of winning is soon dashed by buyer’s remorse when paying your mortgage each month puts limitations on your household that you didn’t intend.

Learn how to stand out

Not all bidding results center on money. Sometimes the person that wins the bid isn’t the one offering the most money. Home selling is as emotional for most sellers as is home buying. Owners selling the home they lived in and raised a family in often want to know that the home’s buyers will do the same. So, if some of the bidders are investors, but you’re buying to make a home for your family, let the seller know. Write a personal letter to the seller about what owning their home, living in their neighborhood, sending your children to their local schools, would mean to you and your family. Let them know you’ll cherish the home the way they did.

Add an escalation clause

If you suspect there will be a bidding war on the home you’ve selected, include an escalation clause in your offer. Such clauses are addenda that automatically increase your bid by specified amounts up to a set maximum that you’re willing to pay. So, if you make an offer and someone outbids you, your agent can immediately increase your bid by the predetermined amount up until someone else outbids your maximum. This sort of clause always ensures you have the top proposal to that point.

Be open to negotiation on contingencies

When you’re in a bidding war, sometimes the least complicated bid wins the day. That is, proposals with fewer requirements such as specific closing timing, move-in dates, minor repairs, home warranties, etc., and who pays more in the closing costs can tip the scales in your favor. On item not to dispense with, however, is home the inspection. 

If you think a property you want might end up in a bidding war, seek out an agent with plenty of experience to help you navigate the complexities involved.

About the Author

Kathy Dulhagen

 I relocated to Myrtle Beach, SC from New Jersey with my family in 2012, Started my real estate career in South Carolina as a licensed Realtor in 2013, received my Brokers License in SC & NC in 2018.

I am a dedicated professional with designations as a Seniors Real Estate Specialist (SRES) and Accredited Buyers Representative (ABR), I understand the importance of being a reliable and knowledgeable resource, acting with honesty and integrity for every client. I devote time to my community as well as my local association as a member of the Hospitality and Professional Education Committees.

I offer my clients knowledge and expertise and an exemplary approach to customer service that is second to none. My professional background in executive administration lends to a unique skill set in my attention to detail, my understanding of real estate law and consumer representation, as well as my ability to negotiate, without compromise, I am the REALTOR® to help you find the home of dreams.

I am a Full Time Licensed Real Estate Agent in South Carolina, a member of the National Association of Realtors, the South Carolina Association of Realtors, the Coastal Carolina Association of Realtors and the MLS (multiple listing service)

Specialties: 55 Places Partner Agent, Active Adult Communities, 55 Plus Communities, Buyer's Agent, Listing Agent, Relocation, New Home Sales Specialist

"Move to What Moves You"