How to Bid on a House With Multiple Offers

Bidding on a house that already has several offers can be discouraging. You might think there’s no chance of winning a bidding war in a competitive market. However, there are a few strategies you can implement when bidding on a highly coveted home. Keep reading to find out how to bid on a house with multiple offers.

Make the highest offer

The most obvious way to get your offer accepted is to make the highest offer. The seller might be hesitant to let you know what their highest offer is because they want to get the most amount of money for their home. Ask your agent to contact the seller’s agent to get a better idea of how high the seller’s current offers are. Agents tend to communicate better between each other than buyer and seller. 

Include an escalation addendum in your offer

Another way to make your offer more competitive is to include a purchase price escalation addendum. An escalation addendum is a clause that automatically increases your bid by a specific amount over competing offers, up to a maximum price. This helps buyers outbid the competition without having to continuously revise their offers.

Let’s say you put in an offer on a home for $500,000. Your escalation addendum allows for a $10,000 increase over competing bids, up to a $600,000 maximum price. If a new buyer puts in an offer for $505,000, your offer would automatically increase to $515,000. However, if another buyer puts in an offer for $600,000 and your maximum price is $550,000, then your offer wouldn’t pass $550,000.

Give a large, non-refundable earnest money deposit 

Another way to grab your seller’s attention is to offer a large, non-refundable earnest money deposit. An earnest money deposit is a lump sum of cash paid into an escrow account by the buyer as an act of good faith. Typically, buyers can get their earnest money deposits back if the sale falls through and they have contingencies in place. Offering a non-refundable earnest money deposit without these contingencies, may make your offer more attractive. 

By providing the seller with an earnest money deposit directly, buyers can waive their right to a refund in case the deal falls through. Although this method is very risky and not recommended as you’re essentially handing over free money. Since earnest money deposits are usually 1% to 3% of the home’s purchase price, this means offering your seller 2%-4% (or more to secure the deal). Run the numbers first and be prepared to make that payment. 

Limit contingencies in your purchase contract

Including contingencies in your purchase contract allows you to back out of a deal penalty-free. Buyers often include contingencies related to financing, appraisals, inspections, and the ability to sell their current home. The most common contingency among buyers surveyed by Zillow in 2024 was that the property passed a home inspection (66%). Contingencies protect the buyer, but often inconvenience the seller. Waiving contingencies makes your offer more attractive to sellers because it reduces the chances of a deal falling through.

Get pre-approved

Offering a seller more money isn’t the only way to make your offer competitive. Sellers also value secure financing. Most sellers worry that a deal will fall through due to lack of financing. By including a pre-approval letter in your offer, you show the seller that at least one lender is willing to provide you with the funds you need to buy the home. Almost all mortgage buyers (94%) reported getting pre-approved for financing in a 2024 Zillow survey.

Begin your pre-approval process with us at Zillow Home Loans* to secure a verified pre-approval letter that you can include with your offer.

Be flexible with closing 

Another thing sellers look for is an easy close. If you’re not able to increase the dollar amount on your offer, consider covering some, or all of the seller’s closing costs. You could also suggest an earlier closing date. Sellers typically prefer to sell their homes as soon as possible.

Draft a personal letter

In the past, buyers often included personal letters in their offers to stand out from other buyers. Today, personal letters aren’t as common, but they could help you tug at a seller’s heart strings. Letting go of a home can be difficult for any seller, especially if it was their family home or if they have to sell due to financial hardship. Including a letter in your offer gives you the opportunity to let the seller know you’ll take care of their home.

Strategize an offer with your agent

In fast-paced markets, it can be difficult to know which strategies work best. Hire an agent that’s familiar with the market you’re buying in and discuss your options at length. An experienced agent can tell you what has worked with clients in the past and what sellers are looking for in an offer. They can also help you determine which homes are worth submitting an offer above sales prices and how much more would be too much. 

Final thoughts on bidding on a house with multiple offers

When submitting an offer on a home that has multiple offers, it’s important to be objective and realistic in your approach. Buyers who have a surplus of money in their homebuying budget can consider submitting an offer well above the home’s original sales price, including an escalation addendum, or providing a non-refundable earnest money deposit.

However, if you find yourself in the middle of a bidding war when you’re tight on cash, you’ll need to find other ways to stand out as a buyer. Consider getting a pre-approval letter, eliminating contingencies in your contract, closing quickly, or drafting a personal letter. Closing quickly and eliminating contingencies can be risky, but your agent can advise you through those processes. Getting a pre-approval letter and submitting a personal letter don’t come at much risk to the borrower, but they do require a certain time investment. 

*Zillow Home Loans; an equal housing lender. NMLS #10287