What is a highest and best offer? When a seller receives multiple offers on their property usually they will ask all interested buyers to submit a final offer by a certain time and date. The idea is that this is the highest amount the buyer is willing to p ay with the best terms possible. Usually there is no additional negotiation other than perhaps asking the buyer to change a closing date so interested buyers should offer the maximum amount of money they are willing to pay for the property.
How do you put together the highest and best offer? There is a lot more than just purchase price in a highest and best offer. Here are some other items you need to consider when putting together this offer as well as strategies to help you win in a highest and best offer situation:
1. Get your real estate team (your Realtor and mortgage lender) on the same page to ensure a smooth transaction, particularly your lender. You don’t want to find out that you can’t qualify for the amount of money you’re offering if you go above the list price.
2. Mortgage pre-approval (if applicable): if you’re using a mortgage, make sure you have an up-to-date pre-approval which is submitted with your offer. Also, you need to be comfortable with the offer you’re putting in.
3. Flexibility: if possible, try to have a short closing day (45 days with a mortgage and 21 days with cash) unless the sellers have a specific closing date in mind and limit your contingencies (ie: if you have a house to sell prior to this purchase). The cleaner the offer, the higher your chance of having your offer accepted.
4. Don’t be too picky: sellers want to work with an easy buyer. Talk with your Realtor and come up with reasonable requests. For instance, we don’t suggest asking for a home warranty if you’re in a multiple offer situation.
5. Consider an As Is offer: an As Is offer means you do an inspection, but won’t ask the sellers to make any repairs. You are agreeing to buy the property As Is. After the inspection you can still choose to walk away if you aren’t comfortable with the inspection results, but you won’t ask the sellers to fix anything if you choose to move forward with the purchase.
6. Have your lender call the seller’s Realtor and assure them that you are a strong buyer and won’t have any issues qualifying for the loan.
7.Write a seller love letter telling the seller about yourself and why this is the perfect home for you.
8.Consider a price escalation rider.
Why do sellers ask for the highest and best offer? It gives all bidders and equal opportunity to have their offer considered and it shows how committed a buyer really is.
Questions? Contact me at firstname.lastname@example.org or 717.963.0016.