How to Win a Bidding War on a House

Be prepared to offer above the asking price and accommodate a seller's timeline when doing battle in a bidding war.

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Written by Barbara Marquand
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Edited by Alice Holbrook
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When you finally find a home to buy in a hot seller's market, you probably won't be alone — other eager buyers will have spotted it, too.

Bidding wars happen when multiple buyers compete for the same property, driving home prices higher, and they’re more common in markets with a lot more buyers than homes for sale.

You may not be able to avoid bidding wars when home shopping and you shouldn't let the competition scare you off. But you will need to get ready. If you're concerned about finances, understand that a good strategy involves more than just throwing around extra money (although that often helps). Here's how to prepare for battle and eventually come out on top.

Get preapproved for a mortgage

Unless you plan to buy a house with cash, get preapproved for a mortgage from at least one lender before home shopping. A mortgage preapproval informs sellers and real estate agents how much a lender might let you borrow. It’s based on a credit check and review of your finances, but pending full underwriting.

Without a mortgage preapproval in a competitive market, your offer will go to the reject pile.

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