Have you ever been involved in a bidding war buying properties?

My last home purchase had multiple offers on it and our market has been hot since 2011. My offer came in at $25k over asking price because I knew other offers were in already (and that the home was well under-priced).

My offer was for cash (via HELOC funds). One of the other offers came in for about $75k over asking price but the home needed a new roof and the selling agent convinced the seller that my offer was more solid because it was less likely that the other high offer could either get their financing or get the necessary appraisal to make it happen.

Not a bidding war - we'd walk first - but we have of course been up against other buyers before. Actually a month or so ago. Place was listed way low - I think Realtor was a snob and had NO IDEA what the place was worth to an investor. So we offered $500 over list, in cash, and $500 in DD funds to the Seller. So the Seller gets to keep DD funds regardless, and he was getting an additional $500. DD funds do go against purchase price so it wasn't a big deal to us.

So total $500 extra we won against the other Buyer, who offered full price but didn't add that $500 in cash to the Seller.

Bidding wars in California are nothing new. Here's my story. At the low of the last real estate dip, 2009, I decided to buy myself a new residence. I have purchased dozens of rentals over several decades.

I must have looked at over 250 homes and found 100 of interest. I made written bids on over 30 properties. So long as my offer was below or at asking price, it was ignored.

All of my offers were for "Cash", no loan contingency, with proof of funds. Short escrow -- close in 30 days or less.

Most of my competition were first time buyers or would-be investors with pooled funds. They were willing to pay way over market by some 10%-30%.

So I found a home with a unlisted defect. A septic tank, no sewer to the city. In California there in no certification process for septic systems and most lenders won't lend on homes here with a non-certified septic system. So when I showed the listing and selling agents this flaw, they were going to have to get each offer modified. So I made a non-contingency bid for 10% over the asking price with proof of funds.

The owner, a bank that foreclosed, had 40 other homes in the area for sale. So they took my offer because it got one property off of their hands. Finally all of this work for one home. The first day the realtor got 17 written offers.

When I was flipping in CA in the early 2000's virtually everything had multiple offers. Buying or selling. People were camping outside new tracts for a chance to bid. I remember at Marshall Reddick's seminars people were standing 4 deep at the tables to buy homes sight unseen at full retail!

But it didn't matter. Buy it for whatever, slap on some paint, sod and stainless appliances then jack the price 200 grand and the next folks would pay 5% over asking and be happy they won!