First, an honest caveat: there is no fixed percentage for overbidding, and we do not see what is ultimately paid at the notary's office. Our data are asking prices, not transaction prices. What we do know: in sought-after cities and popular price ranges, the asking price is in practice often a starting price, while in calmer markets you can sometimes simply bid at or even below asking. In this article you will read how to judge what is needed in your situation, and above all how to overbid without putting yourself in financial trouble.
Why does overbidding happen at all?
Overbidding is the logical result of scarcity. There are simply more serious buyers than suitable homes, especially in the mid-range segment of the larger cities. On top of that, many homes are sold through sealed bidding: everyone makes one offer without knowing what the others are bidding. Selling agents also sometimes deliberately set the asking price a little low to attract many viewings and trigger a bidding war. The asking price is then not a valuation, but a marketing tool.
How much overbidding is normal?
That differs per home, per district and per week. Instead of quoting a national percentage that says nothing about your street, you are better off reading three signals yourself:
- How long has the home been for sale? If a house is still online after three weeks, bidding pressure is low and heavy overbidding is rarely necessary. It is a different story for a home that is under offer right after the first viewing weekend.
- What do comparable homes cost per square metre? Compare the asking price with recent listings in the same neighbourhood. If the asking price is clearly below the local average, expect bids to be pushed up to the level of the rest. Also read our analysis of the average house price in the Netherlands.
- How busy was the viewing? Ask the agent how many viewings there have been and whether offers are already on the table. Ten viewings in one day means competition; two viewings in a week means room to negotiate.
Roughly speaking: in overheated urban districts you should expect winning bids to be several percent to sometimes more than ten percent above the asking price, while in relaxed regions bidding at or below asking is perfectly common. Let your offer be driven by the local situation, not by a national average from the news.
The valuation risk: overbidding partly comes out of your own pocket
This is where things often go wrong in practice. You can borrow at most 100% of the appraised value of the home. If you bid €30,000 over the asking price and the appraiser values the home at the asking price, you have to bring that €30,000 yourself, on top of the buyer's costs. So before you bid, check how much of your own money you have and how much of it you can spend on a possible valuation gap. An offer you can finance on paper but cannot pay after a disappointing valuation is not a smart offer.
Smart overbidding: how to set your offer
- Set your maximum in advance, based on your financing and your own savings, and do not go beyond it during a bidding war. Emotion is the most expensive bidder.
- Bid an unusual amount. In sealed bidding, many offers end in round numbers. With €411,500 instead of €410,000 you sometimes win by a hair.
- Be careful about dropping resolutive conditions. Bidding without a financing contingency makes your offer more attractive, but shifts the entire risk to you. Only do it if your financing is already rock solid.
- Use the statutory cooling-off period. After signing the purchase agreement, you as the buyer have three days to reconsider. Not a licence to bid impulsively, but a safety net.
- Losing is also an outcome. Buyers who get outbid ten times often end up overpaying out of frustration. New homes always come on the market.
The difference between cities runs into tens of thousands of euros
How much room you have to overbid naturally also depends on the price level you are entering. In our own housing supply, the national median asking price is €470,000. It varies considerably per city: Haarlem sits at €550,000, Utrecht at €510,000, Zwolle at €450,000 and Groningen at €325,000. Overbidding by ten percent therefore means a very different amount in Haarlem than in Groningen.
Want to know what is for sale in your city and what homes cost per square metre? Check the current listings and neighbourhood scores on Buurtje.nl before you decide on your offer.
Source: our own current housing supply on Buurtje.nl, median asking prices of private homes for sale. Asking prices are not transaction prices; what is actually paid after a bidding war falls outside our data. Not financial advice.
