🔥 What Is a Bidding War in Real Estate?
A bidding war occurs when multiple buyers compete for the same property, driving up the price through competing offers. Bidding wars often happen in a seller’s market where demand exceeds supply.
How a Bidding War Happens
Bidding wars usually begin when multiple offers arrive shortly after a listing hits the market. Sellers or their agents notify buyers that there are competing offers, giving each the chance to submit their “best and final.”
- Low inventory and high demand spark buyer competition.
- Homes priced strategically often attract multiple bids.
- Buyers may include escalation clauses to outbid others automatically.
For FSBO sellers, the Flat Fee MLS exposure on major sites like Realtor.com and Zillow increases visibility and the likelihood of multiple offers.
Benefits and Challenges of a Bidding War
Benefits for Sellers:
- Higher final sale price due to competitive bidding.
- Stronger negotiating position and faster closing timeline.
- Potential for cash or contingency-free offers.
Challenges:
- Managing multiple offers can be time-consuming.
- Buyers may withdraw if bidding becomes too aggressive.
- Appraisal issues can arise if the final price exceeds market value.
FSBO Tips for Handling a Bidding War
If you’re selling For Sale By Owner (FSBO), plan ahead for multiple offers by setting clear rules and deadlines:
- Request all offers by a specific deadline.
- Compare not just price — but also financing, contingencies, and closing terms.
- Use a escalation clause to identify the strongest buyer interest.
- Document all offers and responses to maintain transparency.
Brokerless provides MLS-level visibility for FSBO sellers, helping attract multiple offers and giving you full control of negotiations.
Related Real Estate Concepts
- Escalation Clause – automatically raises an offer when competing bids are received.
- Counteroffer – a seller’s response to adjust terms of an offer.
- Purchase Agreement – outlines final terms once an offer is accepted.
Frequently Asked Questions About Bidding Wars
How do sellers handle multiple offers?
Sellers can request best and final offers, accept one, or counter multiple buyers. The best strategy balances price, financing, and reliability.
Should FSBO sellers disclose other offers?
While not legally required in most states, transparency builds trust and can motivate higher offers when handled professionally.
Can buyers withdraw during a bidding war?
Yes. Buyers can withdraw until their offer is accepted in writing. Escalation clauses or time limits help define how long an offer stands.