Ground Rules for Buying a Home in a Competitive Market

Instead of rolling the dice, consider these strategies for buying a house quickly in a hot market.

Kallee Feuz Dec 3, 2020

Buying a house is no trivial pursuit, particularly in a seller's market where "for sale" signs disappear faster than Boardwalk® on a Monopoly® board.

To score your dream house in a competitive housing market, you need to know how to play the game. And as with conquering a classic board game, it takes a solid grasp of the rules, some strategy, and a little luck, to compete with other buyers on the checkered path to homeownership.

Don’t roll the dice to determine your future, though. Instead, consider the following ground rules for buying a house quickly in a competitive market.


To reach your ultimate destination of homeownership with your finances intact. 

Gather Materials

  • Credit report. Since your credit score directly impacts the mortgage rate you qualify for, you’ll want to make sure your credit report is in top shape. In normal times, you can pull a free credit report once a year from the three major credit reporting bureaus at But during the COVID-19 pandemic, Equifax, Experian, and TransUnion are offering free weekly online reports through April 2021. Check to make sure there are no blemishes or mistakes that could stand in the way of your dream house.
  • Down payment. When placing an offer on a house with multiple bids, a solid down payment could help show the seller your financial footing is strong. That’s because your house purchase contract will generally state how much you plan to put down. Depending on the type of mortgage loan you choose, you will need to put down anywhere from 3% to 20% of the price of the house (For a $250,000 house, that’s a down payment of between $7,500 and $50,000). Down payment funds can come from savings, gifts or government assistance programs.

Set Up

  • Find a mortgage lender. Talking to mortgage lenders should be one of the first steps in the homebuying process. A mortgage officer can help you determine how much house you can afford. And since interest rates and fees can vary greatly among lenders, shopping for a home mortgage before you hit the open houses will also give you time to find the best loan terms. You can schedule an appointment to meet with a Zions Bank Mortgage officer to discuss the process virtually, by phone or in-person.
  • Get prequalified. Getting pre-qualified for a mortgage will put you in a stronger position to make an offer when the right house for you comes along. A prequalification letter is a first-look evaluation of your ability to qualify for the loan. You provide your bank with documentation of your income, assets, and liabilities, and the lender also checks your credit report. A prequalification letter shows the seller you are serious about the offer and are in a strong position to qualify for the loan.[cite::8780::cite]
  • Lay all your cards on the table. Rather than relying on how much a bank is willing to lend, do your own math to figure out how a mortgage will fit into your budget. Take stock of your finances, including how much money you bring in each month and how much you pay out. Don’t forget to factor in expenses you will add once you become a homeowner, like property taxes and homeowner association fees.
  • Study the market. Compare neighborhoods and research local house sales to get an understanding of the local housing market. Knowing what properties in the area are selling for will help you act more decisively when you are ready to make an offer. Take advantage of real estate listing tools, reports from local real estate associations, and the expertise of real estate professionals.
  • Consider listing your existing house first. Buying a new house before the current one is sold means you will have to afford two mortgage payments or put in an offer that’s contingent on selling your current house. In an environment of low inventory and high demand, that contingency clause could be a deal breaker. If you expect to face stiff competition on your next house, consider selling your existing house first.


  • Pay attention. Keep a watchful eye over movements in the market so you can be first in line when the right house comes up. Check new listings daily — including those appearing on real estate agency or trade association websites such as the National Association of REALTORS® — for real-time alerts when new properties hit the market.
  • Rely on a seasoned real estate agent. A reputable real estate agent can give you the upper hand in a bidding war since they have experience negotiating deals and understanding the needs of all parties involved. Look for real estate professionals who come highly recommended and then interview several of them to find the best fit.
  • Be flexible. A buyer can negotiate all kinds of terms in a purchase contract, like asking the seller to pay closing costs or cover a house warranty. But in a seller’s market, these extra requests could cost potential buyers the deal. Conversely, offering some flexibility, like being willing to adjust the closing date, can be your trump card in a competitive market. 
  • Tip your hand. While conventional wisdom holds that you should keep your cards close in a negotiation, doing just the opposite can be a smart play when trying win a bidding war. An escalation clause is a real estate contract that states the maximum amount you’re willing to increase your offer if another buyer offers to pay the same of more. Your real estate agent can help you include an escalation clause that fits with your strategy and your budget.
  • Write a letter. As a final chess move, some homebuyers write a letter to the seller to personalize their offer and stand out from the crowd. Generally, a homebuyer’s letter explains what the house means to you and why you want it. The goal is to build a connection and convey your feelings about the house.

Choose a Banker

Still have questions about buying a house in a competitive market? Our experienced Zions Bank mortgage loan officers are available to help answer questions or find the right Zions Bank mortgage loan[cite::8014::cite] for you.

Kallee Feuz is a Public Relations officer for Zions Bank in Utah.

The terms Monopoly® and Boardwalk® are registered trademarks of Hasbro/Parker Brothers. The term REALTOR® is a registered trademark of the National Association of REALTORS.

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