Comment by conductr

No, making an offer is a bid. It’s cost nothing to make an offer. Multiple offer situations were the norm for a few years in much of the US. Many listing agents will post on the listing “multiple offers, best and final due by X date”. Nobody knows if that’s true or has spent any money yet by making those offers (earnest is put down only once an offer is accepted). This is US I don’t know if you’re from elsewhere or just misinformed but you’re wrong.

There’s a lot going on between making an offer and losing earnest money.

I’m selling a house right now that’s in bad shape so getting lowball offers. They don’t even submit an offer, they text me or call me and tell me what price they would offer. They don’t want to do the paperwork for something I’m just going to ignore. Yet, if it turns into 2 or more people floating numbers I like I will tell them to write it up then I will tell them there’s another offer and try to get them to go higher. All that is before I accept there offer and earnest money is put down after that. So the bidding war is over by that time.

Even if earnest money did work how you describe, it would tie up a few thousand dollars per property for a few days max then be returned and redeployed on another property. These companies have deep enough pockets to fund that. There earnest money only ever enters the picture of their offer is accepted.