Jeson Clarke

What is a Real Estate Bidding War?

If you've ever spent time navigating the real estate market in an in-demand area, you know how competitive things can get. When there's limited inventory available and an influx of buyers looking to move into the area, competition can turn into an all-out bidding war!

Bidding wars occur when two or more prospective buyers want to purchase a home. Instead of caving, these buyers will put in increasingly higher bids. The goal is to outbid the other buyers to get the property.

Why Do Bidding Wars Happen?

These events are more common than most realize. They typically occur in areas where the real estate market is ultra-hot, but the supply can't keep up with the demand. You see it in sought-after neighborhoods that people want to move into.

In many cases, buyers wait months or years for a home to be available. But when one finally does, other buyers will jump at the opportunity. The result is that bidding wars ensue.

Are Bidding Wars Good or Bad?

It all depends on where you fit into the equation!

As a seller, a real estate bidding war is the dream scenario. Of course, sellers want to maximize the final sale price of their property. When bidding wars occur, participants often go far beyond the initial asking price. It's a way to take advantage of market conditions and generate more money than you initially thought you could. Who doesn't want that?

On the other hand, bidding wars can be a nightmare for buyers. The goals of a buyer are the opposite of a seller. They want to lower the price as much as possible while streamlining the sale. That isn't possible when bidding wars ensue. Typically, buyers need to offer significantly more than the asking price. In many cases, they'll also modify the terms of their offer, removing contingencies and waiving inspections to sweeten the deal.

They can be frustrating, but that's the price to pay when moving into a sought-after area. If you want to buy a home in a popular location, you should always be aware of the risks that bidding wars will occur.

Author Resource:-

Jeson Clarke advises people about real estate, property investment and affordable housing schemes. You can find his thoughts at real estate platform blog.