GLOSSARY — REAL ESTATE TERMS
Multiple Offers / Bidding War
A multiple offer situation occurs when a seller receives two or more competing offers on a property at the same time, often leading to a bidding war where buyers raise their price or improve terms to win the property.
How sellers handle multiple offers
A seller receiving multiple offers can accept one outright, counter one or several buyers simultaneously, or request each buyer submit their "highest and best" offer by a set deadline. California requires agents to present all offers to the seller, regardless of how many come in.
How buyers compete beyond price
Price is the most visible lever, but buyers also compete on stronger financing (larger down payment, fewer financing contingencies), a flexible closing timeline that matches the seller's needs, waived or shortened contingencies, and an appraisal gap coverage commitment.
WHAT TO DO IN A COMPETITIVE BIDDING SITUATION
- Get fully pre-approved, not pre-qualified, before you're in a bidding war
- Ask your agent which contingencies are safest to shorten versus waive entirely
- Decide your appraisal gap coverage limit before you're mid-negotiation
- Write a clean, specific offer rather than relying on price alone to stand out
Does the highest offer always win?
Not necessarily -- sellers also weigh financing strength, contingency terms, and closing timeline, so a slightly lower offer with stronger terms sometimes beats a higher but riskier one.
Should I waive contingencies to compete?
It can make an offer more competitive, but it increases your risk substantially -- discuss with your agent exactly what you'd be giving up before waiving inspection, loan, or appraisal contingencies.
What does 'highest and best' mean?
It's a seller's request for each interested buyer to submit their strongest final offer by a specific deadline, after which the seller chooses among those submissions.