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Key Takeaways
- Understanding the current state of the real estate market and the presence of multiple offers is crucial if you want to make a competitive home offer.
- First, it’s important to assess your financial situation, get pre-qualified or pre-approved for a mortgage, and explore different financing options.
- You’ll also need to thoroughly research the property you’re interested in and evaluate its value, condition, and the local market demand.
- Pricing your offer competitively, minimizing contingencies, and finding ways to stand out from the competition are key strategies for making a winning home offer.
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Congratulations, you’ve found your dream home! Unfortunately, so did four other bidders. Maybe the home is in a sought-after neighborhood, the housing market has a tight supply, or interest rates are favorable for buyers. Whatever the reason, there are steps you can take to ensure that your offer catches the seller’s eye.
Understand the Market
When it comes to making an offer that becomes the winning bid, sometimes timing is everything. Nationwide, houses are averaging 47 days on the market, according to the most recent data from the National Association of Realtors (NAR). If a seller is looking to get out of one property to finance the purchase of another, they might want an even shorter timeline.
Housing inventory is currently tight, which means each property on the market is in high demand. This is advantageous for sellers who want to reach a deal quickly—and given the demand, they’re likely to get at least their asking price, if not more, should a bidding war arise.
Note
Recent NAR data show that in February 2026, 14% of homes sold above their list price.
In real estate, a bidding war can occur when multiple buyers are vying for the same property. The buyers compete by incrementally increasing their offers, often pushing them higher than the asking price. NAR February 2026 data show that houses on the market got an average of 2.3 offers, up from January and flat from a year ago. That’s why taking the steps to ensure your offer stands out boosts your odds of having the winning bid.
Research the Property
Thoroughly research the property you’re interested in. This includes the property value, condition, and market demand. Reviewing other listings in the area can give you a good idea of your target neighborhood’s market. There are also online tools, such as this one from the Bank of America Real Estate Center, that can help calculate the approximate value of a home.
Additionally, choosing the right real estate agent or broker who specializes in helping buyers make competitive offers can give you an upper hand. When vetting agents, the National Association of Realtors recommends looking for those listed as Accredited Buyer Representatives—these are agents who focus on working directly with buyer-clients at every stage of the home-buying process.
Your agent can also help identify what is most important to the seller, like how much their listing price matters, whether they prefer an investor with cash on hand over a first-time buyer with a mortgage, and how quickly they want to close.
Make a Strong Offer
It’s crucial that you price your offer competitively. If the home price is reasonable, you could lose out with a lowball offer. In a competitive market, putting in a slightly higher offer to stand out may make more sense.
To determine the right offer price, you can analyze comparable sales. Your real estate agent can create a comparative market analysis (CMA) to help you compare the price of your dream home to what similar homes sold for in the area. A CMA considers the location, size, construction, condition, style, and other factors. If you’re not working with an agent, you can do your own comparisons by researching recently sold properties in the area on websites like Zillow.
As noted above, with homes in high demand, properties are likely to sell at or above the asking price. If you sense you’re up against multiple buyers, it may be smart to offer at least the asking price upfront.
Warning
Make sure you know how much home you can afford well before making an offer. You can use our mortgage calculator to help determine what you can afford.
Here are additional tips for making a competitive offer.
- Show proof of mortgage pre-qualification. This means that a lender has completed a cursory review of your finances and pre-qualified you for a home loan. This can be advantageous in a seller’s market because it speeds up the buying process. There are plenty of mortgage lenders or brokers that offer competitive financing options for homebuyers, whether you’re veteran buyers or first-timers.
- Offer more earnest money. Earnest money is a good-faith deposit toward the purchase of a home, typically around 1% to 3% of the purchase price. In a competitive market, you may choose to increase this to 5% or higher to stand out and prove your commitment. It’s delivered when the sales contract or purchase agreement is signed, but it can also be attached to the offer. Note that you must ensure that the deposit is refundable in case you choose not to proceed with the purchase. Typically, a contract is written up during the exchange of the earnest money that outlines the refund conditions.
- Prepare an escalation clause. An escalation clause is a way to automatically escalate your bid by a certain dollar amount, up to a certain ceiling, to compete with other bids. Escalation clauses are written by the buyer’s and seller’s agents. Your agent can also help you determine what’s appropriate, as it’s smart to keep your offer close to the home’s appraised value.
Should You Negotiate the Price in a Competitive Real Estate Market?
In a seller’s market, the pressure is on the buyer to offer a competitive price. Home prices are typically higher in a seller’s market, and with high demand for housing, the seller has more power in negotiations than buyers do.
As a buyer in a seller’s market, you likely won’t be able to negotiate much. However, there may be room to negotiate if the home needs some work. Your biggest asset on which to base your negotiations will be comparable homes in the area that sold for a similar price, and how their conditions compare to the one you are bidding on.
Still, with multiple offers, the seller is unlikely to make concessions and will go with the best offer.
Minimize Contingencies
To make your offer more attractive to the seller, you may also want to minimize your contingencies.
A contingency is a clause that buyers can include when making an offer that allows them to back out of the purchase if the terms of the clause are not met.
The buyer may write a contingency clause into an offer that stipulates the home must pass inspection. Should there be issues—such as a shoddy foundation or mold—discovered by the inspection, the buyer has the opportunity to withdraw the offer or negotiate a lower price.
You can also structure a contingency based on the appraisal. The lender providing the mortgage for the property will send an appraiser to assess the value—if it’s determined to be of lower value than the sale price, it could prompt a contingency clause that lets the buyer request a lower price or abandon the transaction.
Without a contingency, for example, buyers risk losing their earnest money deposit if they decide not to purchase the property after making an offer.
You aren’t required to include contingencies in an offer, but it’s a good idea to include at least one to ensure you get your earnest money back. Most buyers include home inspection contingencies, appraisal contingencies, and mortgage contingencies in their offers.
If you want to expedite the sale or make your offer more attractive to the seller, you may waive a few of these contingencies. It’s recommended that you keep your home inspection contingency, as this will ensure you purchase on the condition that the home is structurally sound.
A general inspection contingency requires a review of the home’s plumbing, appliances, roofing, and integrity to ensure you’re making a wise—and safe—investment. However, there are less crucial ones, like a buyer’s sale contingency, which allows buyers to back out of a sale without legal repercussions if their property doesn’t sell first. If you have the funds to waive this contingency, it can be advantageous for the seller.
Important
It’s best to consult your agent or broker on which contingencies can be left out of your offer.
Stand Out from the Competition
With mortgage pre-approval, an earnest money deposit, and limited contingencies, you will show the seller that you’re ready and able to move quickly on a purchase.
And while these details are important parts of the deal, one more can be the clincher: connecting with the seller emotionally. When making your offer, write a personal letter telling the seller why you love their home.
Whether it’s the neighborhood, the dream kitchen, the amazing landscaping, or the history, telling the seller you see a future home in their home is yet another effective way to stand out from the competition.
Tip
Getting ready to buy your first home? We’ve created a guide to walk you through each step so you can make smart financial decisions in an unprecedented market. Check out “Owning It: How To Buy a House“ to learn more.
Do I Need a Real Estate Agent to Make an Offer on a Home?
No, you do not technically need one to make an offer. However, an agent will help you minimize contingencies and gauge a proper offer price.
How Do You Structure a Counteroffer?
If you want to counteroffer a seller, there are options beyond raising your offer price. For example, you can increase your earnest money deposit, which shows the seller you’re committed to buying the home. You typically have one to three days to structure and submit your counteroffer. As mentioned above, it’s best to move quickly in a hot market.
Who Should Pay Closing Costs in a Competitive Market, the Buyer or the Seller?
Closing costs are the associated fees and expenses that are paid when a real estate transaction closes. The full amount depends on factors that include the home’s price and location, and the type of financing being used. Both buyers and sellers incur closing costs. Typically, buyers pay around 2% to 5% of the property’s sale price in closing fees, while sellers tend to pay slightly more—around 8% to 10% of the price. Closing costs for sellers are often deducted directly from the sale proceeds, while buyers pay their portion out of pocket.
If you have the means and want to make your offer more attractive to the seller, you can offer to cover some of the seller’s closing costs, such as title fees or transfer taxes.
When Should I Make an Offer Over the Listed Price?
A higher offer could give you the upper hand if it’s a seller’s market and there are multiple bidders on a home. Always gauge your offer, even if it’s above the asking price, with the home’s condition and the local market in mind to ensure you aren’t overpaying.
The Bottom Line
With the demand for homes higher than supply in many markets, it’s important to make a competitive offer to ensure you catch the seller’s eye. Getting mortgage pre-approval, minimizing contingencies, and offering more earnest money will all make your offer more attractive. In the event of a bidding war, an escalation clause or a personal letter to the seller may help seal the deal.
No matter how badly you want the home, remember to keep your offer contingent upon a proper inspection and your offer price within range of the home’s value.
