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When selling a home, should you always take the highest offer?

Asked by Trulia Los Angeles, Los Angeles, CA Thu Mar 7, 2013

What are some reasons not to?

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Answers

32
BEST ANSWER
The short answer is No!

The ultimate goal in a real estate transaction is to get to closing, thus the best offer is the one that gives a seller the greatest "certainty of closing."

There are several factors that can contribute to this certainty such as:

1) financial might. A cash buyer, one with a substantial down payment or an offer without financial contingencies.

2) Willingness to commit. A larger than normal initial deposit (more than 3% of purchase price) or short contingency periods

3) Speed to closing. Transactions that are to be completed under 30 days.

4) Track record of the buyer. In an investment transaction look for a record of performance from the buying entity.

5) Track record of the buyer's agent. Successful people tend to find each other. Equally, successful brokers tend to spend more effort vetting their buyer's before submitting offers.

All of these factors should be considered in addition to the price offered for a successful transaction.

Best of Luck!
Allan S. Glass
President
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2 votes Thank Flag Link Thu Mar 7, 2013
If you want to sell, highest price is not always the best choice. You are choosing a buyer that will CLOSE. There are times that the highest offer is someone with a smaller down payment, like an FHA buyer... if this is your only choice, great, go for it... but if you had multiple offers, you want to choose the offer with the best terms and price with the most likelyhood of being able to close the deal, even if some minor hiccups come up along the way.
2 votes Thank Flag Link Fri Mar 15, 2013
No ,not necessary the top offer maybe F.H.A. & require that your home be in great condition ! The second offer could be 2,500.00 less but as is all cash ,no termite report or work to be done ,there are a lot of variables ,please consult with your Realtor .Good Luck !
1 vote Thank Flag Link Sat Mar 1, 2014
Not necessarily. There are so many factors to consider. If one offer is a cash offer, that cuts a mortgage out and shortens closing time. That is just one example of a lower offer you might consider.
1 vote Thank Flag Link Sat Mar 1, 2014
No, make sure who is the most likely to actually close.
1 vote Thank Flag Link Sun Sep 8, 2013
Not always, as many have pointed out already it’s about whether or not the transaction will close. What I also consider on my own properties are the type of financing (some programs are a pain in the butt with many inspections), amount the purchaser is putting down, all cash deal, time to close, agent on the other side, & other details contained within the contract. We have a couple of Realtors® in our area who are infamous for renegotiation after the home inspection to the tune of demanding wish list items which always total a couple of grand, hence a seller beware situation. To me a Reasonable good clean transaction always trumps a little higher price! Good Luck!!!
1 vote Thank Flag Link Sat Mar 16, 2013
There is more than price.. how qualified is the buyer? Is it all cash? What are the contingencies... what is the timeline? Will they be re-negotiating...
\
It does you no good to accept the highest offer that does not intend to close at that price or that is has no chance of closing.

Do you have an agent helping you out? Feel free to contact me if you need additional help.

Ron
1 vote Thank Flag Link Thu Mar 7, 2013
The highest offer is not always the best. There are many factors to consider such as financing, cash, down payment, time frame to close.
0 votes Thank Flag Link Sat Mar 22, 2014
It all depends on your expectations of the sale. All offer have different choices and you have to pick the one that works for you.
0 votes Thank Flag Link Fri Feb 28, 2014
Hello,

First and foremost, thank you for posting a question here at trulia. I appreciate it.
Should you always take the highest offer? As many other real estate agents have noted, it depends on several factors. Is the buyer pre-approved? If it is a cash offer, does the person have proof of funds? I hope this helps. If I can be of further assistance, please feel free to contact me by phone, email or text. I am here to help you.

Sincerely,

Melchor Perez
BRE# 01842907
REALTOR®
714-401-8879
perezmelchor8@gmail.com
Star Real Estate South County
0 votes Thank Flag Link Sat Feb 8, 2014
The highest offer might be the most attractive one, but to make a solid decision you really need to dissect the offer, look at the terms, the financial strength of the buyer meaning Fico Score, Down payment, reserves and make sure the lender that's approving them is reliable. And most important of all look at your Net. Accepting the right right offer is not difficult, it just takes a little work.
0 votes Thank Flag Link Fri Feb 7, 2014
Not necessary, the highest offer maybe a F.H.A. offer with a low down payment ,F.H.A. could require you to do work to the property also to close escrow .You should consult with your agent regarding the pro's & con's of all offers !
0 votes Thank Flag Link Sat Dec 21, 2013
Offers are judged by terms and conditions.
Price alone is not everything.
For example, cash and quick closing mean certainty to a seller.
A financed buyer could offer more money, but not get a mortgage because the appraisal would not
come into value, for example.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Sun Dec 8, 2013
Depends on the situation, sometimes the offer with the least contingencies is the best.
0 votes Thank Flag Link Sun Dec 8, 2013
Not necessarily, as it's possible the highest price offer may be made by the weakest buyer making an offer and if the sale doesn't close then the premium price offered means very little.

Additionally there are there considerations such as timeline or caveats or conditions in the offer that need to be factored in. While price is certainly the primary consideration, it's hardly the only one and this is where having an experienced Realtor working exclusively on your behalf and honoring their fiduciary responsibility to you can make the difference between a successful closed sale and an exercise in frustration and lost time.
0 votes Thank Flag Link Sun Dec 8, 2013
Not necessarily. Most of the times, buyers with high offer price are backed by some type of financing. Question is, is it guaranteed that they will get approval? Can you wait?

If you received other offers, then you might want to consider the ones who is likely to close the deal.



-----
CFS Mortgage
http://www.whywaitbuytoday.com
0 votes Thank Flag Link Sun Dec 8, 2013
The highest offer isnt necessarily the best offer. Like many others have said the whole goal of a real estate agent is to get you to close. The offer that gives you the best chance to close is usually valued the highest.

Sincerely,
Ricky Smiles Jr.
Rodeo Realty
Rsmiles@rodeore.com
760.650.5024
BRE # 01940776
0 votes Thank Flag Link Sat Dec 7, 2013
It would depend on the terms of the offer and whether or not you are interested in fulfilling those terms. Good luck!
0 votes Thank Flag Link Fri Dec 6, 2013
No.... Always have your Realtor go over every detail of the contracts with you.... most contracts are very different and you need to know the differences... does the contract have any contingencies? do they have a home that has to sell before they can buy? Is it a mortgage, cash? are they qualified? I could go on and on.... Not only do you need a good Realtor, Have a good attorney view offers as well....
Just my humble opinion
0 votes Thank Flag Link Thu Dec 5, 2013
"Highest offers" can have strings attached that need to be weighed carefully. Probably the best example of this is what is commonly existing with banks and "foreclosure" sales, where it is common knowledge that these sellers will very often accept a lesser cash offer over a higher financed one.

Just keeping it real,

Bill
0 votes Thank Flag Link Thu Dec 5, 2013
You need to take the best offer. That may be the highest or it may be the one paying all cash with no contingencies. The highest offer may only have 5% down but the offer within $10,000 of that offer might be all cash. I would go with all cash.

Jason P. Galardi
Multi Million Dollar Listing Agent
Keller Williams Beverly Hills
C 310-980-1256
E jgalardi@mmdla.com
BRE# 01322753
0 votes Thank Flag Link Wed Oct 2, 2013
Hi Seller,

There a several things to consider when considering a offer. Price is always a strong determinant but not the only thing to consider.

Thing to Consider:
- Price
- Prospective buyer's pre-approval from direct lender. Pre-approval should be verified by the seller's Realtor.
- Source of funds (verify buyer's monies for down payment, closing cost and reserves).
- Buyer's closing period examples 30, 60 or 90 days. Based on buyer's pre-approval verify commitment date for loan approval, interest rates and terms. If loan approval is for 45 days and buyer is asking for 60 day escrow there is a problem.
- Buyers good faith money should be a minimum of 03%.
- Verify inspection dates and inspection contingency removal dates.

Price is great but verify that prospective buyer can qualify for the price and loan related to price.Good Luck!

Gail Mercedes Cole
EXP Realty Marina del Rey
yourwestsidehomes. com
310.853.9933
0 votes Thank Flag Link Sun Sep 8, 2013
no, the highest offer could have a sale contingency that some has to sell a home or an F.H.A. offer that you may be required to do some repairs before the buyers could buy your property ! Good luck !
0 votes Thank Flag Link Sat Sep 7, 2013
While price is always the typical first priority, it's not the only one. The primary reason not to take the "highest Price" is that the remainder of the terms of the contract aren't what a seller is looking for and/or the buyer's qualification aren't as good. Time to close gets considered and a cash buyer is always a more likely bet to close on time than someone with a mortgage. By the same token someone with 3% down is much more questionable than someone with 20% down.
0 votes Thank Flag Link Sat Mar 16, 2013
After nearly twenty years, all of the stories surrounding real estate have one thing in common - whether the sale closed or not.

As LA Richard points out, you need to choose a buyer who will CLOSE.
0 votes Thank Flag Link Fri Mar 15, 2013
take any offer you want. It is up to you.
0 votes Thank Flag Link Thu Mar 7, 2013
No! There are several other things to consider when accepting an offer such as buyer's credit worthiness, contingencies, length of escrow, or it could just be how you feel about the buyer and how clean their agent wrote up their offer. Lots of time the buyer with the highest offer does so just so that you will accept their offer and later on they ask you for unrealistic credits after completing their inspection.
0 votes Thank Flag Link Thu Mar 7, 2013
GREAT Question!!!

The highest offer may not ALWAYS be the best offer.

I have had plenty of cases where the highest offer ended up being a buyer that could not get their loan funded.

Some reasons not to simply take the highest offer:

1. The buyer has a credit score that will not qualify them for the BEST prevailing rate. These buyers may back out once they realize how much their monthly payment will be.

2. Buyer is approved by a loan broker vs. a direct lender

3. Size of buyer's down payment.

4. Buyer has limited cash reserves

Kawain Payne, Realtor
0 votes Thank Flag Link Thu Mar 7, 2013
Take the offer that meets your needs the best and is most certain to close. Sometimes a seller needs a quick closing, the offer that meets that, even if its lower may be the best. You don't have to take it though, a great agent would tell the buyer's agent, "we have a higher offer but we like your closing date better, if you can improve your offer we may take it" or words to that effect.
A great agent will review the offers with the seller and discuss not only the price and closing date, but strength of the pre-approval letter, secondary details like inspection and other contingency time frames, the reputation of the buyer’s agent (Some agents are miserable to deal with and should be avoided) and the entire package.
There can always be issues that are hard to calculate that may come into the picture as well. I present a cover letter with my offer explaining my buyers strengths and interest and their appreciation of the house and the neighborhood. I am always careful not to violate any fair housing guidelines, but I give the seller a reason to like my buyer even if they aren't the highest.
0 votes Thank Flag Link Thu Mar 7, 2013
There are multiple factors/terms to consider besides price. Such as but not limited to: contingency, buyers strength , downpayment and ability to qualify for a loan, escrow closing terms, inspection terms, etc...

It is always best to hire a professional and licensed Realtor who can look up for your best interest!



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0 votes Thank Flag Link Thu Mar 7, 2013
Highest is not always the best. Take the offer that can close the deal!!! If the highest is the best in terms and shows great credit scores and proof of funds to close then yes, but I wouldn't say as a rule that the highest is best.
0 votes Thank Flag Link Thu Mar 7, 2013
Absolutely not! Highest offer does not mean best terms. Is the buyer pre-qualified or pre-approved, or even better is it a cash buyer who doesn't need to obtain a loan. There are many variables to consider. Not just price. Your local real estate agent should be able to guide you through the variables of an offer.
0 votes Thank Flag Link Thu Mar 7, 2013
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