This Simple Move Could Help You Win a Bidding War

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • A dearth of housing inventory means bidding wars are still common in today's real estate market.
  • One move could give you an edge over the competition if you land in a bidding war.
  • Getting a mortgage pre-approval can help you stand out as a buyer.

It's an easy step to take.

Buying a home has largely been a struggle in 2022 for a number of reasons. First, there's mortgage rates, which have been rising sharply since the start of the year. Next, there's a lack of housing inventory for buyers to choose from.

When the real estate market lacks inventory, sellers get the upper hand. That means they can get away with sky-high prices. But that's not the only byproduct of limited inventory. When there aren't enough available homes for sale, buyers tend to have to compete over the same ones in a process known as a bidding war.

And bidding wars can be stressful and costly. After all, the whole point is to outbid another buyer in the hopes of coming up with the highest price so a seller accepts it. And even if you're willing to make an offer that's way over a listing price, you might still end up losing a bidding war.

Unfortunately, until housing inventory picks up, we should expect bidding wars to stick around for quite some time. But there's one simple move you can make to give yourself an edge if you land in one.

Get pre-approved for a mortgage

There's a reason sellers tend to favor cash buyers, as opposed to those who need a mortgage. Cash transactions are less likely to fall through since the buyer has the money already and doesn't have to worry about closing on a mortgage. But if you get a pre-approval letter from a mortgage lender, you might ease a seller's concerns in that regard.

Mortgage pre-approval doesn't guarantee that you'll get an actual mortgage. But if your financial circumstances don't change between the time of your pre-approval and the time you officially apply for a mortgage, then chances are, you'll have no problem snagging that home loan.

Just as importantly, when you make an offer on a home with a mortgage pre-approval letter in hand, it tells sellers that you're a serious, viable buyer whose finances have been looked at by a lender. And so if you're in a bidding war and you're up against a few other buyers who don't have mortgage pre-approval, that point alone might give you an edge.

Plus, the good thing about getting a mortgage pre-approval letter is that you'll have a clearer sense of how much money you qualify to borrow. That could help you bid more strategically if you do end up having to duke it out with competing buyers.

How to get a mortgage pre-approval letter

If you need to get pre-approved for a mortgage, the process is pretty similar to shopping for an actual mortgage: Contact different lenders and see what they come back with. You'll usually have to provide some financial information or documentation, but it may not be the same amount as with an actual mortgage application.

Once a lender has reviewed your financial details, it should issue you an official document showing what loan amount you're pre-approved for. The process tends to be quick (you might have that letter in hand within a week or so), and you can take that pre-approval letter with you to any home you look at and use it to present yourself as a more appealing buyer.

All told, there's really no downside to getting a mortgage pre-approval when you're looking to buy a home. And given how prevalent bidding wars are today, having that letter in hand could give you a serious advantage over other buyers.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow