When Do I Walk Away from a Bidding War?

After months of searching, you’ve finally found your dream home. The only problem is, the seller has received multiple offers, and they keep coming in. This is when a bidding war can ensue, and some buyers may be stretched to their limits–but there’s also a time and a place to walk away!

The Bidding War Defined

A bidding war is a real estate term when the seller has received multiple offers on their home in a small period of time. This creates an environment where the seller can wait and see if a buyer is willing to raise their offers or make concessions to make their offer seem like the best option.

How Do Bidding Wars Get Started?

In the simplest terms, bidding wars brew in seller’s markets where supply is exceeded by demand due to scaling back on inventory, choice locations, or home amenities that can compel certain buyers to go into competitive mode.

Emotions can run high and things can get ugly, with buyers sometimes forgetting what their initial plans even were. Do they walk away, or fight for a stronger negotiating position? When a bidding war starts, it can seem like it may never end. 

When to Walk Away from a Bidding War

If you have found yourself in a bidding war, there is a time to walk away! Here’s when to throw in the towel:

1. The Home is Out of Your Budget 

If you started off with your best offer, it is best to stay out of the bidding war. In a seller’s market, many buyers are offering well above asking price in cash. If you are preapproved for a certain amount, you may not be able to meet those demands.

2. The Home Needs Major Repairs 

If you are anticipating putting a lot of work and repairs into the home, it may be in your best interest to find a new home. Beware–a bidding war may take the available cash you had for those repairs and leave you with a lot of projects you can’t afford to fix.

3. The Pressure is Too High

It can be very easy to become emotionally involved, especially if the home in question is highly-desired, so the competitive pressure is on and sound judgement can go out the window. At this point, step back and reevaluate whether your decisions are based on logic or rivalry. If it’s the latter, avoid making mistakes and step away.

4. The Terms are Unreasonable 

It’s a bidding war and the ball is in the seller’s court, and if you feel the seller’s terms are trying to squeeze more out of you than you’re willing to risk, it may be time to consider another property.

Make Your Exit…Strategically

If you feel the goal posts are being moved in negotiations, remember you can still leave the table. Here’s how:

• Stick to Your Budget: Have a maximum amount and don’t bend from it, no matter how heated the bidding gets, especially when you know it’s motivated by ego and sheer emotion.
• Know the Market: Take the time to study the most current market trends to see if homes are going for above their listing price. Maybe consider waiting for when conditions are in your favor and less competitive.
• Work with a Realtor: If the market is hot and you feel your temper and emotions are going the same way, it might be time for a different, more knowledgeable perspective. Enter a real estate agent, someone with the experience and savvy to best inform you when it’s best to exit the deal. 

Know When to Walk and Get a Realtor’s Help

Don’t think of walking away from a bidding war as defeat with a white flag in the air, it comes down to knowing what your goals are and not losing sight of them just because things have turned competitive. Having a realtor with you at the negotiating table who has experience with bidding wars and sellers’ agents can be invaluable.

You don’t have to do this alone. Contact realtor Linda Moore today to guide you towards the home you want, without compromising your budget, or your dreams.