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Buying a Home in Seattle

Bidding War Blues: Secrets to a Successful Home Offer

You Didn’t Get the House. Now What?

It happens. Try as you might, sometimes the cards aren’t in your favor. You can push beyond your comfortable budget, waive every contingency, pour your heart out in a seller love letter and still find yourself on the losing end of a bidding war. And it sucks, it really sucks.

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So, what do you do when the housing marketconstantly rips your heart out? Should you stand tall in the face of seemingly insurmountable odds? Should you cower and retreat? Has the thought crossed your mind, perhaps I wasn’t meant to own a home, at least not right now…”

What do you do when you lose offer after offer?

The answer, of course, is it’s entirely up to you. I could sit here and tell you to never give up, that you should double down and keep putting in offers until one gets accepted. That would be easy for me to say. But, it may not be so easy for you to do. You only have so much time, money, and energy, after all. There does come a point where you must reassess your goals—and your means—when it comes to buying a house. Perhaps the market has changed since you began your search—home prices are seasonal, after all, and they tend to go up over time. You could take a break for a few months, try your luck again once your mental and emotional batteries have had time to recharge.

Regardless of what you choose to do now, you’ll likely end up back in the home search rat race, eventually. Let’s figure out how to make your next offer experience less painful. Let’s discuss what you need to do to finally write that winning offer.

What’s In a Winning Offer?

AKA, “How to Win the House of Your Dreams.”

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As teased above, sometimes you can pour it all into your offer and still not win the house of your dreams. Frustratingly (and I mean like really, REALLY frustratingly), you might even submit the objectively best offer out of the bunch, and yet, inexplicably, the seller chooses a worse option. Why would they do this? Well, maybe they fell prey to a gut-wrenching love letter from a little old grandmother who just wants to find a place to fade into the sunset and die in peace. So, they took her offer even though it was $20,000 less than yours. (I kid you not, this happened to a client of mine. Scroll to the end for some more colorful tales of offer woes.)

Assuming the seller is not insane, and you’re not competing against the sob story of the century, here are the key ways you can increase your odds of having your offer accepted.

The Winning Offer Formula

In competitive markets, writing a winning offer requires that you do everything and anything in your power to bend the fates in your favor. For your reading pleasure, here’s a rough rundown of the Get Happy at Home “Competitive Offer Order of Operations”.

(1) Price

(2) Escalation

(3) Contingencies (Inspection > Financing > Title > Anything Else)

(4) Closing Date

(5) Earnest Money (Amount and Release)

(6) Minutia/Miscellany

PRICE – What’s the House “Worth”?

The highest price offer usually wins. It really is that simple.

Now, I know no one wants to “overpay” for a house. But the sad truth is there’s no objective dollar amount that a house is “worth”. It’s worth what someone will pay for it. It might sound trite, but it’s true. And, in a competitive market, the person worried about overpaying never gets the house. Never.

With home prices, as with all commodities, the basic law of supply and demand rules, The art of determining what a home is worth (aka how much you’ll have to spend to win it) is really the art of determining what other people (people like you) are willing to pay. In a stable, balanced market, this is as simple as checking the prices of recently sold comparable properties. Control for certain variables, condition, style, yard size, etc etc, and voila, you have your market price. But the Seattle/King County housing market is certainly not what I’d call balanced. So, figuring out how much you need to pay is tricky, and will likely require you to spend more than the home’s listed price.

How to Go Over List Price, the Right Way

This chart shows the average percent over list price of homes sold in King County over the last year, by month. Scary, but, with the right approach, not insurmountable.

Going over list price is a touchy subject with would-be home buyers. Rightfully so. You don’t go to the grocery store and offer $10 for a $5 steak. Unfortunately, we operate in more of an auction style economy when it comes to home sales. We have to look beyond the sticker price and ask ourselves some difficult questions.

When the right house comes along, the only three questions you should ask yourself are:

(1) At what price would I be ok with losing this house to an offer thats only $1000 higher than mine?

(2) Will this house appraise and if not, do I have the extra cash to cover the gap? (Talk to your agent about this.)

(3) Can I afford to feed myself given the mortgage required to hit that price?

This is how you decide what amount to offer. If your (hopefully competent) real estate agent says that amount still won’t do it, perhaps you just don’t offer at all. Losing takes a toll, especially when you lay it all out on the line. Sometimes it’s ok to walk away before you enter the race.

But, if there’s a shot, and you’re ok with the odds, go for it! All you have to lose is time and energy. At least you get to keep your money for another day!


A corollary to price. Your escalator is the amount you are willing to spend above and beyond the price of the NEXT HIGHEST offer. Your escalator should be based on the relative price of the property, with a consideration towards seller psychology. Seller psychology 101: five figures is twice as big as four ($10,000 looks about twice as good as $7500) and cash offers are inherently better than financed (If you want to beat a cash offer, you’d better come in at least $20,000 higher). Keep in mind that quite often the escalator is a moot point and your offer is automatically escalated to your price cap by competing offers. So, choose that top number wisely using the questions laid out in the previous section.

CONTINGENCIES – Sellers Hate These

Sellers hate these (it bears repeating).

Contingencies are the things that exist in an offer to keep you, the buyer, safe and protect you from a purchasing a potentially bad house and/or landing in a catastrophic financial situation. The more contingencies you “waive” (don’t include in your offer), the stronger the seller will consider your offer to be. Now, to be clear, we at Get Happy at Home loathe waiving contingencies unless:

(1) it’s absolutely necessary to compete, and

(2) we have fully explained the relative risks and benefits to our clients.

With that in mind, if you are going to waive contingencies, you should do everything in your power to ensure that decision won’t come back to bite you in the rear. This means doing a pre-inspections, making sure you review the title report prior to writing your offer, talking with your lender to confirm your finances are rock solid, speaking to your agent to see if the home is likely to appraise, and so on. If you do these things, you can feel at least somewhat more comfortable sticking your neck out with waived contingencies.

Which Contingencies Should I Waive?

Sellers don’t treat all contingencies the same. Some are more oppressive than others. Usually, a seller will order the importance of contingencies like so (in descending order of importance):

Inspection > Financing > Title > Anything Else

Put another way, the seller would rather see you waive your inspection than your financing, your financing than your title, etc, all things being equal.

Inspection > Financing > Title > Anything Else

There’s a lot more to say about the decision to waive contingencies than I can fit in this one blog. So, please make sure you confer with your agent before you deciding to waive contingencies in your offer.


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Sellers want to get deals done FAST. The faster you can close the transaction, the more likely your offer is to be accepted. If you want to offer a fast close, make sure you vet your lender well. This really comes down to them more than anything else.

Most local Seattle lenders can close a transaction in 30 days or less. Some national banks might need slightly longer. A great lender can close in as little as two weeks. A close this fast is as good as gold when it comes to writing competitive offers. In the eyes of sellers, days are money, and we know they like money.


This is the “good faith” money you put up at the start of the transaction to show the seller you’re serious about completing this purchase. If you break the contract—aka, if you back out of the deal without good legal cause (contingencies are one)—then the seller may be entitled to keep your earnest money as recompense. In the Seattle area, earnest money amounts typically equal 2-5% of the list price. Amounts larger than 5% can look impressive to the seller (remember seller psychology, the bigger the number, the better), but may have little actual importance to the deal, as state law only allows the seller to keep a maximum of 5% of the contract purchase price as damages in case of a buyer’s breach of contract.

We at Get Happy at Home like to keep earnest money numbers high: at or around 5%, in most competitive situations. The idea is that this money will be going towards your down payment anyways, and, unless you back out of the deal, which we would make sure you know not to do, there’s no harm in increasing the earnest money. but still, it’s a relative risk, and we’d be foolish to say otherwise.

Should I Release My Earnest Money to the Seller Early?

If you’re the real crazy type, you can make things even riskier by releasing your earnest money early. This means escrow (the closing agent) will deliver your earnest money directly to the seller at some point prior to the closing of the transaction. While you may still have a technical legal recourse to recover this money if the seller breaches the contract or you utilize a contingency escape clause, the practical effect of releasing earnest money is you have no way to get it back short of a lawsuit. And the results of that lawsuit are not guaranteed. For this reason, we try to release earnest money only in the most competitive of situations, and only with our seller’s full acknowledgment of the risk. Frankly, it’s one of my least favorite things to do. When dealing with cash-light buyers, I almost never advise it.


There are other “contingencies” that one can waive. Technically, most everyone waives the right to have a lawyer review the contract—that is, of course, unless you work with us, in which case you have little ol’ lawyer me to look things over—because the NWMLS uses standardized contracts and people don’t see the need. There’s also the information review period (checking if the seller provided any false information), HOA review (mostly relevant with condos; less of a big deal with single family homes), seller disclosure review period (a Washington State statutory protection), and lead paint inspection contingency (a vestige of federal law). There may be others in certain situations as well, but these are less likely to come up and sellers may assume you’ll be waiving them as a matter of course.

Losing Offers Hurts — How to Actually Move On

So, now that you know how to write the perfect offer, you’re good to go, right? Well, no. We’ve already said it—you could do all the things discussed above and still lose. If this happens more than a few times, you may start to feel like the punching bag at your local pugilist club. Here’s how our three step process to help you move on when you lose, and how to avoid it happening again.

  1. Debrief. Talk with your agent. Find out why your offer wasn’t accepted. Don’t be afraid to press for details. We’re here as extensions of your will; we have to share these things with you. And, if you want more information, it’s our duty to get it. The more information you have, the better prepared you’ll be to win the next offer.
  2. Decompress. Take some time and let yourself feel your emotions. They’re going to come anyway, might as well let them process naturally rather than try to ignore it. That’s a quick way to pop like one big bitter human balloon. Usually, the sting of “losing” a house only lasts a few days. Once you get back on the horse, that feeling will fade, rapidly.
  3. (Re)Design. Once you’re ready, it’s time to figure out the next steps. How will you change your strategy going forward? Do you need to look at lower priced houses, search in different neighborhoods, or perhaps consider a “fixer-upper”? If what you’re doing isn’t working, you and your agent will need to manage expectations so that you can take aim at something that actually works for you. If you have lost 3 or more offers and not seriously adjusted your tactics, it may be time to find someone else to represent you.

Final Thoughts

Losses happen. We all take our lumps. In this market, 9 out of 10 buyers will lose at least one offer. It’s going to stay that way for the foreseeable future. Matt and I are committed to carrying our clients through these tough times by writing realistic, competitive offers, managing expectations, and adjusting strategy as need be. We don’t ever want to be the agents writing 10 or 20 losing offers for our clients. We’re in the business of GETTING our clients houses, not LOSING them. We will keep using the strategies outlined above to make sure that happens.


We Can Help

Feeling defeated by the home buying process? It doesn’t have to be this way. At Get Happy at Home, our expertise and tailored strategy mean our clients typically find their dream home within just 1-3 offers. Let us turn your home buying journey from a story of frustration to one of success. Contact us today and discover how we can help make your dream a reality sooner than you thought possible.



POSTSCRIPT – Colorful Tales of Offer Woes

In a competitive market, the price of a home is something of a crapshoot. I find myself writing this blog coming off of three heartbreaking loses for well prepared, well executing buyer clients. In chronological order we lost because:

1.) Two other people decided they’d pay “whatever it takes” to get a property in the Green Lake/Tangletown area of Seattle. Both were cash buyers and they ended up paying 30% over list price for a small craftsman. This was the highest percent over list sale in the area for the prior 6 months.

2.) A 2 bed, 1 bath, 1200 square foot house (albeit with a *potentially* convertible basement) in Ravenna received 32 offers. Despite us offering 30% over list price (we learned from our past experience), we were outbid by an offer that went $400,000 over list (40%+, breaking the prior record). Again, all cash.

3.) Different client. We wrote an offer that was same price, but better terms, than the only other offer on the table. But the sellers decided to go with the other offer because “they turned theirs in first and we wanted to give them a fair chance.” Bulls***. Straight bulls***.

C’est la vie!

Want to know more?


Ryan Palardy