During my 30 years in real estate , I’ve heard it time and time again:
“…but we put in the highest offer, shouldn’t that guarantee we get the home?”
Your answer, plain and simple, is “no”. Many homebuyers believe, especially in a multiple-offer situation, that the buyer who offers the seller the most money wins. Sure, sometimes a seller will only see dollar signs and ignore everything else, but in reality, the highest offer doesn’t always work.
Any good real estate agent will advise their seller not to just look at the numbers, but to look at the offer as a whole, and take everything into consideration before accepting.
Here are three reasons why the highest offer won’t always get you the home.
1. Cash trumps all
If you can pay cash, your lower offer will trump a higher-priced offer, every time. Sellers LOVE an all-cash buyer because there are no mortgages or lenders involved, escrow closes faster, and there’s no appraisal to worry about. The whole process runs a lot smoother and faster.
2. The trusty pre-approval letter
The next best thing to a cash offer is a pre-approval letter. A pre-approval letter is a letter provided by your mortgage broker or bank that confirms you are ready to buy in a set price range and have been pre-approved for the loan. This gives the seller the security they need to trust your offer. So if another buyer puts in a higher offer without a pre-approval letter, you may have the advantage over them.
3. Timeline flexibility
A typical closing period can last anywhere between 30 to 90 days. If you really want to win over the seller and beat out high offers, customize the length of the closing to suit the seller’s needs. Most sellers want the quickest closing possible, so if you can do it, offer it! Other times sellers have time restrictions. For example, their dream house won’t be ready for another 90 days. They’ll need more time, and if you’re able and willing to give it to them, you can beat out higher offer that won’t budge on their timeline.
Remember the highest offer doesn’t always get the home! Always look for ways to beat out the highest offer and land your dream home!