This Family Beat a Higher, All-Cash Offer on a Dream Home. 5 Expert Tips to Help You Win in Today’s Competitive Market

A photo to accompany a story about buying a home in a competitive housing maret Courtesy of John and Tarryn Melkonian.
John and Tarryn Melkonian pictured here with their children. The Melkonians were up against multiple bids on their dream home, one that was higher and all-cash. Here's how they came out on top.
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Massachusetts homebuyers John and Tarryn Melkonian found themselves facing a very common and stressful scenario in today’s intense real estate market.

They fell in love with a house that had 10 other offers, one of which was a full-cash bid that was higher than theirs. 

“We really fell in love with the house. We didn’t want to let it go,” said John Melkonian. 

The housing market is as competitive as ever. And homebuyers are feeling the pressure.  

Home inventory is shrinking, and homes are selling faster. According to’s latest real estate data, inventory is down 26.8%, and homes sold 11 days faster in 2021 compared to 2020. Mortgage interest rates have been rising lately, pressuring homebuyers to move quickly to lock in the best mortgage rate possible.

But the Melkonians still managed to land their dream home despite the tough competition. They worked with their realtor to craft a strong offer that won out — even though it wasn’t the highest.

How, exactly, do you pull that off? It depends on your specific market and house, but real estate experts say there are a number of tools you can use to navigate today’s highly competitive real estate market successfully. Here are five expert tips and more on how the Melkonians won their home bid.  

5 Tips for Buying a Home In This Competitive Real Estate Market 

Making a successful offer on a home starts before you even begin house shopping. Be sure to check these steps off your list before you wade into the market.

1. Get Preapproved

Before you even think about making an offer in today’s highly competitive market, you’ll need one crucial document: A preapproval letter. This is a letter from a lender that says how much of a mortgage you qualify for, and consequently, how much you can offer on a home. 

“You don’t want to get out there and start looking at properties you can’t afford,” said Candice Pagliarulo Hodgson, owner and principal broker at Lyv Realty in the North Shore, Massachusetts area.

With today’s low interest rates, you might even be able to afford more than you initially thought. But going through the pre-qualification process is the only way to know. “It’s your compass,” Pagliarulo Hodgson said.

Plus, preapproval letters are basically a requirement for making an offer on a home, because they show the sellers you’re a serious buyer who can pay what you’re offering.

2. Work With an Experienced Realtor You Trust

Finding a real estate agent who you align with and trust is one of the most important things you can do. Spend time shopping around for a realtor just as you would anything else: Do your research and check out reviews from past clients.

You can even schedule “buyer consults” — basically, an introductory conversation — with multiple realtors and choose who you like best, Pagliarulo Hodgson suggests. 

“It’s very, very important as a buyer to really be represented by a very reputable, long standing firm and a realtor with lots of experience. That’s number one. You need somebody who’s been through this market before,” said Lisa Van Wagenen, Miami Realtor at Brown Harris Stevens. 

It’s not just about finding someone you feel comfortable with. Each agent also has different areas of expertise and different professional networks that can make all the difference when submitting an offer.

The Melkonians found a buying agent they felt comfortable with. She was “instrumental in getting us a new house” and “was a fantastic experience,” said John. 

Having a strong reputation between the buying and selling agents carries a lot of trust and weight, said ​​Pagliarulo Hodgson.

Finding an experienced agent also goes a long way in protecting you as the buyer. Make sure your realtor has a good understanding of home contracts and knows how to safeguard your money and interests throughout the legal process. “It’s the most important thing,” Van Wagenen said.

3. Be Patient and Don’t Panic Buy

The Melkonians spent time browsing online and didn’t attend any open houses until they were serious about a house. When they found “the one,” they were prepared to move quickly with an offer. They left room to negotiate but stay under budget. “We were willing to go a little bit higher,” John said.   

Because buying in today’s market is so competitive, Pagliarulo Hodgson tells all of her clients to be prepared to compete against 10 or 20 other offers, and set a limit ahead of time on how much they’re willing to spend.

Pro Tip

Before you get carried away in todays’ highly competitive market, set a realistic limit on how much you’re willing to spend — and stick to it.

Van Wagenen is also keen on educating her buyers on the local real estate market so they understand which homes are a good value and which are simply overpriced.

Even so, it can be hard to resist the urge to outbid others if it means securing your dream home. Pagliarulo Hodgson suggests grounding yourself in the numbers to make sure you don’t go overboard.

“Make sure that it fits within your comfort zone for [your] budget monthly. And make sure you’re making an offer that you can live with,” Pagliarulo Hodgson said. Put another way: “What number are you okay with losing this house at?”

4. ‘Show Me the Money’: Earnest Money & Down Payment

Making an offer on a home isn’t free: Buyers usually submit what’s known as an “earnest money” or “escrow” deposit, representing about 5% to 10% of the purchase price, along with their bid. This is another way to show a seller you’re serious and have money available.

But more important than the earnest money deposit, said Pagliarulo Hodgson, is the size of the down payment you’re offering — which can be anywhere from 5% to 20% of the purchase price, or more. (The earnest money deposit eventually becomes part of the down payment at the closing).

“The more money you’re able to put down, the stronger of a buyer you are considered to be,” said Pagliarulo Hodgson. While making a cash offer isn’t possible for everyone, cash is king in the form of a down payment, too. The more you promise to contribute toward the purchase of your home, the more likely a seller is to accept your offer, Pagliarulo Hodgson said.

Cash-strapped homebuyers can boost their bid by applying for a first-time home buyer grant or down payment assistance program. Adding a down payment grant to your offer package can help you compete by appearing more marketable, especially when up against similar bids with larger down payments. 

Here is a complete list of first-time home buyer programs available by state.  

5. Make a Strong Offer

There are many nuances and strategies that contribute to a strong offer — and they’ll vary based on where you live and the specific home you want to buy. Here are some strategies from the experts we talked to:

Waive contingencies: 

In Pagliarulo Hodgson’s market right now, a strong offer could be defined as someone who’s willing to waive the home appraisal. For example: If you bid $500,000 on a home, but it’s only worth $475,000 in the eyes of your lender, you would promise to front the difference (in this case, $25,000) in cash so that your loan doesn’t fall through.

“Your offer is much more solid knowing that the appraisal isn’t a contingency or a concern for the seller,” Pagliarulo Hodgson said. 

This is otherwise known as adding an appraisal gap clause where the buyer commits to cover some or all of the appraisal difference. It’s crucial to only commit if you have the financing to cover it and still remain within budget. If you over-commit you could end on the hook for more than you can afford. 

Research and construct a tailored offer

It’s also crucial for the buyer’s agent to tailor the offer to the specific sellers, said Van Wagenen. 

“You want your agent to do a little homework before you send your offer in writing to them,” she said. Have they turned down other offers? Why? How soon do they want to close? Answering these questions can help you craft the strongest possible offer for those sellers, Van Wagenen said.

Be ready to move fast: 

Get offers in quickly and to show sellers you are serious. “Sellers want the path of least resistance,” Van Wagenen said. 

In the Melkonians’ case, their offer included: Conventional financing, waived inspection, willing to close quickly, and no contingencies, such as the sale of another house that could hold up the closing, said John.  

Create an emotional connection: 

It helps to leverage an emotional connection between buyer and seller. Write a sincere introduction through a heartfelt letter. Include what you like about the home. Seller’s holding onto the home’s sentimental value don’t want to sell their house to someone who plans to change the whole thing or flip it. 

The Melkonians were up against a higher bid that was all-cash. “[Our realtor] did a great job writing a letter to the seller and telling them all about us,” John said. “The presentation made quite a bit of difference.”