How to Win a Bidding War.

When demand for houses outweighs the supply of houses, many consumers think the highest offer is a sure-fire way to claim ownership of their dream home. But bidding for a house doesn't always require upping the stakes.

Accommodate the seller. As a buyer, you have to be flexible and willing to sacrifice a bit. Whether it's being willing to close one month earlier or later, do your best to meet the seller's desired closing time. Additionally, be willing to overlook the more minor and imperfections of a given home because other prospective buyers may not be able or willing to do so. If a seller wants the house sold quickly, they'll prefer to work with the buyer that can be most accommodating.

You must be a qualified, solid, desirable buyer. Get a copy of your credit report and settle any debts. You'd be surprised how many people get turned down for a loan because of an old debt they had forgotten all about. Get pre-approved for loans and mortgages. Being a pre-approved buyer in the negotiation process puts you at an advantage.

Create a rapport with the seller and let them know why you prefer their house to others.Homeowners are often attached to their home and they are usually inclined to sell it to someone who will love it too.

Eliminating as many contingencies as possible will give you an advantage when involved in a bidding war. If you have a home to sell before purchasing, sell it first. Reducing uncertainty makes the buyer more appealing to the seller and will create leverage for the buyer.

Cash talks. Be willing to increase the size of your down payment or make an all cash offer. Often the best way to win a bidding war and avoid paying a higher price is to increase your down payment. Sellers favor strong buyers. If you can afford to make an all cash offer, do so. That's almost always a definite way to slam-dunk a sale.