How to win a bidding war?

With low inventory and multiple offers, it can be stressful to get an accepted offer. Don't lose hope. Winning a real estate bidding war can be a matter of luck, a little bit like gambling. Employ winning strategies but don't get so caught up in the drama of bidding that you go over the maximum price that you can afford to pay. A good gambler knows when to fold and walk away. Do your research and be aware of market values. This will help you to make an educated guess as to what your competitors might be bidding. Then you can bid a little more and this will give your bid an edge over the others.

Have a strong and savvy real estate agent!!!
The real estate agent you choose to represent you should know the market and how to employ winning strategies to help you get the house you want at a price you can afford. Your agent should be assertive but not obnoxiously aggressive, which will put off the seller and not win you the bid. A good agent should be professional and polite and a good communicator. An experienced agent will know the market and help with the bidding, while making sure that you do not overpay. A seasoned agent will have helped other clients make winning bids and will show you how to write a clear offer with good terms. He or she will act quickly to present your bid to the seller and the listing agent.

Be prepared to waive some contingencies
The aspiring buyer who wins a real estate bidding war is not always the one who offers the most money. Making a reasonable offer within the ballpark of the market value of the property is certainly important, but there are intangibles that can count for more. Having credit approval in advance makes your offer look reliable. In addition, you can agree to be flexible about certain contingencies. For example, you can agree not to have the sale dependent on selling your own house first. However, you'd have to be able to carrying two mortgages at the same time. The risk with this is that your home may not sell fast. You can also offer to close at a time convenient to the seller or offer to pay all closing costs. A seller might find these strategies extremely attractive. 

Write a personal letter to the seller
Other strategies include writing a heartfelt personal letter to the sellers telling them how much you like and appreciate their home and want to buy it and live in it with your family; you might even include a photo. This personalizes the transaction and sometimes succeeds in winning the bidding war.

Agree in advance to outbid other offers
A final winning strategy, if you really have your heart set on having this particular house, is to agree in advance to outbid any other offer the seller receives. You can stipulate, for example, that you are prepared to add an extra $1,000 over any other offer. Of course, there should be an upper limit on what you are prepared to pay. This can prove to be an ingenious way for you to win the bidding war.