Definition
A competitive situation where multiple buyers increase their offers in response to each other, driving the price significantly higher than asking. These can feel intense but require discipline.
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Bidding wars can result in buyers paying above market value, particularly in very competitive markets. While these situations can feel emotionally intense, buyers should maintain discipline and set a maximum price they're willing to pay. Walking away from a bidding war is often the wisest financial decision.
Pro Tip
Stay emotionally detached in bidding wars. Remember there will be other homes—overpaying today limits flexibility.
Example
The charming cottage sparked a bidding war with four interested buyers, ultimately selling for $65,000 above the asking price after six rounds of negotiations.