
Do you keep losing in bidding wars due to multiple offers? Low inventory in a sellers’ market can be difficult for buyers and knowing how to position yourself is key to buying the home of your dreams.

Multiple Offer Scenario Requires Mortgage Financing in Place
Step one is to hire a mortgage broker and get pre-approved for a mortgage loan. You make have heard the terms pre–qualification vs pre-approval and are unclear of the difference. A pre-qualification can be a good starting point to shop mortgages without having your credit pulled and get your documentation together.
However, in seller’s market or any market for that matter it is best to be pre-approved for a loan. Pre-approval requires you complete an official mortgage application where a professional will help you do an analysis on your income and asset documents, analyze your credit report, and help you choose the best mortgage product.
You will have a commitment letter to attach to the offer signifying you are pre-approved to obtain home financing. A commitment letter will set you apart from other offers a seller may be considering. Having this legwork completed up front will simplify the mortgage process, close on the home faster and reduce last minute surprises.

Instead of putting down a first and second deposit consider one deposit up front. This shows a seller you are serious and will not walk away if a better property comes along.
No Hubbard’s
If you are looking to buy a home in a sellers market it is key to sell your home before buying. Having a contract with a Hubbard contingency will put you on the bottom of the pile in a multiple offer scenario. With multiple offers there is little chance a seller entertain contacts with Hubbard clause. Sellers will not likely be willing to wait for you to sell your home with other stronger offers on the table even if your offer is higher.
Shorten Time Frames
Shorten all your time frames for home inspections, mortgage commitment, appraisal contingency dates, and closing dates. Working with the seller to meet their time frames for moving will be a be advantage.

Offer Over Asking with an Escalation Clause When there are Multiple Offers.
When in a multiple offer situation homes can go for thousands over the asking price. Maybe you are willing to pay more but you are concerned the home will not appraise preventing you from obtaining a mortgage. Your realtor and mortgage broker will be able to help with this. Putting more money down upfront might be the solution.
Your realtor should do a market analysis on the home to see if it priced at fair market value and guide you on what to offer to will the bidding war.
Many buyers use an escalation clause. That says you are willing to outbid any other offers on the home by a certain amount, up to a certain price which is the most you are willing to pay. This puts a cap on price. An escalation clause protects you financially because it prevents you from paying more than you need to.
Cash is King
Cash is king and in a sellers’ market many sellers will only entertain cash offers. Many buyers will borrow against their 401k or withdraw from their IRA’s. Some use a bridge loan or an existing home equity line of credit (HELOC).
A cash offer eliminates the need for an appraisal and bank approval for a loan contingency. A cash offer shows the seller you are serious about the house and ready to buy it today.
Recasting your Mortgage
Another option is recasting your mortgage loan. This is a feature of some types of mortgages where remaining monthly payments are recalculated based on a new amortization schedule. During a mortgage recast, the borrower pays a large sum toward their principal, and their mortgage is then recalculated based on the new, outstanding lower balance.

Eliminate Contingencies
Real estate agents will most likely tell you not to remove contingencies in a real estate contract to protect your interests, but this can help you beat other offers that sellers are entertaining.
This tactic can move you to the top of the pile of multiple offers but be aware of the risks you take by buying a home without doing home inspections which can cost you later if there are structural, safety or mechanical issues with the home.
Hire an Experienced REALTOR®
An experienced agent can help you gain the upper hand as you navigate a multiple offer bidding war. Make sure you ask the right questions when buying or selling a home. It is very common to get caught up in the excitement of purchasing your first home, however, don’t let yourself make these 15 costly mistakes home-buyers make.
Write a Personal Letter
It is possible to tip the scales with the seller by writing a sincere expression of how much you love the house, and how you can see you and your family living there happily for many years. Homes hold many memories, and it is often very difficult for seller to move on.
It is important to sellers that someone will love and care for the home they raised a family in. In a bidding war a personal letter could earn you enough goodwill to move you to the front of the pack.

Find Out What the Seller Wants and Avoid a Bidding War Altogether
If you have a competitive nature don’t fall into the trap of just wanting to win and continue to increase your price. You may really want the home but having a competitive streak can cause you to dramatically overpay for the house. If you’re tempted to increase your price, again and again, ask yourself this: Do you just want to win, or do you really want the house that much?
Writing a Strong Contract that Appeals to Sellers
Another angle to simply come in with the best possible offer you can reasonably afford, one that still meets all the other parameters. Then live with it whether you win or lose the house.
More information on navigating multiple offers, mortgage information and how to sell your home:
In a sellers’ market it is not uncommon to have multiple bids on a property. Bill Gassett has detailed information on how to outbid other offers by using an escalation clause to purchase the home of your dreams.
Whether you are looking to buy a home or refinance an existing mortgage it is helpful to be aware of potential scams and pitfalls to avoid. Paul Sian looks at some common mortgage pitfalls and/or scams that could end up costing you more money than it would normally.
If you are home is not selling Sharon Paxson has written a great real estate article “5 Obvious Reasons Why Your Home is Not Selling”.
Jamohl Dewald has written an article about things home buyers need to know about the real estate market.
This article Navigating The Market As A First Time Home Buyer 2021 is provided by Kevin Vitali
Real estate and garden information was provided by Eileen Anderson, recognized leader in her field.
If you are looking to hire a top realtor, I can be reached via email at Eileen@eileenandersonrealtor.com or by phone at 860-966-2112.
I am licensed for residential real estate sales in the state of Connecticut including but not limited to the following CT towns: Avon, Bloomfield, Burlington, Barkhamsted, Canton, Colebrook, Granby, East Granby, Hartland, Hartford, Suffield, Windsor, New Hartford, North Granby, Farmington, Winchester, Newington, Litchfield, Simsbury, Suffield and West Hartford, CT.
One thought on “Are You Losing Homes in Bidding Wars Due to Multiple Offers? How to be a Stronger Buyer in a Sellers Market.”
Very timely and good advice for buyers in today’s market.
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