Getting outbid? What buyers can do to stay in the game (and win)

Key insights

• Losing out on a home to another bid is frustrating, but there are strategies you can deploy to be taken more seriously.
• By re-assessing everything from budget to timeline to location, you may find ways to make a stronger offer.
• Buyers can also re-assess their “must-have” and “nice-to-have” criteria to open up more options in their budget.

Buyers today are feeling the squeeze. Home prices are rising, interest rates are elevated and, while inventory isn’t as low as it has been in recent years, it’s also not keeping up with buyer demand. Multiple offers on highly sought-after properties remain common, which can make for a frustrating buying process.

Here are our best insights for navigating today’s market as a buyer. Whether you’re just dipping your toes in or have lost in multiple offers a few times, these tips should help you determine the right path forward.

Re-assess with your REALTOR®

First, it’s time to take a peek at the offers you’ve placed and how you’ve stacked up against the other bids and winning buyers. Your agent may have exact details for some properties, or a range of details, but it’s all helpful. Together, ask:

• Have we been close to winning an offer? Or are we being heavily outbid every time?
• How many offers are typically being placed on the properties we like best?
• How much did they end up going for, compared to our offer or budget? Were we close or quite far off? (If your agent doesn’t have a lot of information, try looking to see if any of the homes you bid on or considered have closed.)

If you are handy with a spreadsheet, it will be helpful to put these numbers into an organized grid and run the numbers even further: What percent have we been off when bidding on houses? Do we tend to bid on properties that have just a few offers or dozens?

Use this conversation to make a future plan. If you’re in the running for the houses you like best, then it may just be a matter of being patient. If you tend to be in the bottom half of offers every time, you may want to adjust your expectations or look to other neighborhoods or cities for houses that better fit your budget.

Offer a flexible timeline

Today’s sellers have a keen advantage in the market… until they sell and have to re-enter the market as a buyer! If you have flexibility in your timeline, you may want to use that to your advantage and make it clear in your offer.

Whether you end up closing in 90 days to allow the seller more time to find their new home, or renting it back to them before you move in, offering more time to the seller can help your offer stand out — even if your monetary bid comes up a bit short.

Rethink your “must-haves”

“It’s pretty common for buyers to have a long list of non-negotiables… until they find a house that just feels right,” said Edina Realty President Sharry Schmid. “Then, suddenly, having laundry in the basement isn’t such a big deal.”

Of course, it’s fine to have standards. But if you have been ultra-picky about the homes you’ll consider, and you’re losing bid after bid, you may want to take stock in the amenities or features you really need.

As an experiment, try touring a few homes that wouldn’t meet your original requirements. Discuss the pros and cons of buying a home with only two garage stalls instead of three, a split-level design, or one that doesn’t have an owner’s suite with an attached bathroom. If you decide to hold strong to your original must-haves, that’s just fine. On the other hand, if you find that you’re willing to make a concession or two, you may just open up a whole new market of possibilities.

Reconsider your down payment, if possible

This will be difficult for many buyers, especially those who have spent years saving up for a down payment. It’s unlikely that you have an extra bank account you haven’t tapped. However, if you’re lucky enough to have family or friends who are willing to provide mortgage gift funds, it may be time to ask for a financial favor. Here are the details on how to legally obtain mortgage gift funds from a personal contact.

Alternatively, you can talk with your REALTOR® or home mortgage consultant to determine if you are eligible for down payment assistance. In Minnesota, funding assistance up to $18,000 may be available; in Wisconsin, the maximum assistance amount is 6% of the home’s purchase price.

Consider other home types

While many buyers are looking for single-family homes with a yard and garage, other housing options are available and can offer just as many advantages. Condos and townhomes tend to have lower price points while requiring less maintenance.

Plus, multi-family housing is a lot different than it used to be. Condos are no longer available in only the swankiest parts of downtown Minneapolis and St. Paul; they can also be found in most suburbs and neighborhoods. Townhomes are not only being built in large developments but also in smaller communities near parks, walkable retail and more.

Search condos here. Search townhomes here.

Need help entering the market as a buyer?

It’s a tricky time to buy, but having the right professional on your side can make all the difference. Reach out to Edina Realty or your REALTOR® today to get started.