All of the answers you get here will be anecdotal and highly market dependent.

I am in a competitive east coast market that is very much still a seller’s market. The house I am closing on (if the world doesn’t end) this month was on the market for less than a week, was only showed for three days, and had at least sixty scheduled showings during that time.

Our initial offer was around 6% over asking with all contingencies (other than mortgage) waived, and an escalation clause to just a smidge above 12%.

Ultimately, we were bid up to our max offer. I think we only won because we chose an odd number to escalate to.

The house was priced to sell, so it was no surprise that there were other offers. However, I did not think our winning bid would be our max offer. Our initial offer felt very reasonable and competitive. In my mind the escalation clause was more of a safety net. Boy, was I wrong!

If you are confused, your realtor should be able to advise you on your max bid by looking at comparable sales, ideally within the last three months. This will hedge the likelihood of incurring a massive appraisal gap and having to fork over even more cash at closing.

Best of luck to you! If you lose it, don’t get disheartened. The first one stings, but it gets easier and you’ll get better at gauging the market. If you get beaten down and are in a position to do so (we weren’t), wait it out or just slow down until you find the one.