Slince the house is already under contract you would not be in a "bidding war" at this point. The seller must honor the first contract, regardless of whether your offer is better or not. At this point they can accept your offer as a "back up" offer, in case their current deal falls. Some reasons why the current deal might fall are: the buyer cannot get approved for the loan, the property doesn't appraise for purchase price, or the buyer doesn't approve of the inspection report.

As terriks pointed out, the home you're talking about is currently under contract so you couldn't be in a bidding war on that property, but could be a back up offer.

For future information should you find yourself in a different situation, a bidding war can occur when two or more parties submit an offer on a specific property within a relatively short time frame (before the seller accepts a contract on the home). You'll be told by the realtor that you are in a multiple offer situation. Often what happens is that it will be suggested you give your best offer in order to "get" the house. You won't be told what the other offers are. The seller can use the other offers on the table to nudge you into submitting a better offer.

If you find yourself in a bidding war, it's important to understand your limits. Don't pay more then you feel comfortable, walk away if the game starts to get too pricey.

So under contract means that the seller and buyer have agreed on a price, and if everything works out (ie, the stuff terriks mentioned, the financing, the inspection, etc. then its a done deal). And if I understand correctly, for multiple offers, they would have to come in all around the same time where the first buyer and seller hadn't agreed on a price yet?

Thanks for the input, as I said, this is somewhat new ground for me. Also, I didn't mean to imply I wanted to neccessarily bid on that house - we hadn't even looked at it yet - but if the first contract didn't go through, then I would like to get a look at it to see if we even wanted to place an offer. Our BA said she's had more deals fall through than ever this past year, but she still said most of them go through.

So under contract means that the seller and buyer have agreed on a price, and if everything works out (ie, the stuff terriks mentioned, the financing, the inspection, etc. then its a done deal). And if I understand correctly, for multiple offers, they would have to come in all around the same time where the first buyer and seller hadn't agreed on a price yet?

Yes.

The laws vary state by state. In NY, nothing is legally binding until both sides sign the contract - so a verbal acceptance means nothing. Once each side signs, the property is 'under contract' and neither side can pull out without financial repercussions except as specified in the contract (financing falls through, property fails inspection, etc). Most sellers here write in a 10-day window after sign date for inspection to take place, and ask for mortgage approval information within a specified time period as well, so if the contract falls through, they can get in touch with other interested parties ASAP.

In the multiple-offer negotiations I've been involved in, most have come in at the same time, usually when the listing is fresh and generating the most interest. When our place received multiple bids, we had four or five offers within the two-week period right after we listed.

When we'd purchased that same place nine years before, however, the then-seller had multiple offers stretched out over months. He had been in torturously long negotiations with the second buyer (like, three or four months of back-and-forth) when we saw the place - the broker told us there was a contract out but neither side had signed. We were willing to match the previous bid AND sign the contract right away, since the sticking points for the first buyer were non-issues for us.