What is “Highest and Best”?
If you are not familiar with that term, it is probably because you have not tried to buy a house in this Hot, Hot, Hot Sellers Market…
In Florida today, most homes will get multiple offers so calling for a “highest and best” is a way for the seller to wait to review all the offers at the same time. Otherwise they may receive a better/higher offer after they already accept an early bid.
Here is how it goes…
The seller's agent puts a house on the market and indicates that “Highest and Best” offers will be reviewed in usually 3-5 days by a certain time. That gives more buyers an opportunity to look at the property and submit an offer.
The request is for the buyer’s highest and best offer...because the buyer may not get another chance to raise their price. In other words...everyone must give it their best shot!
Does Cash Talk?
Usually, but not always.On occasion, the seller will accept a financed offer from a buyer that is not as solid as a cash buyer, which sometimes does not make sense.
Cash is simple with no appraisal contingencies and no chance of the quality of the property not suiting the lender.
Bidding on a deadline for “Highest and Best” means you have to put your best foot forward and submit the highest price and terms that you are comfortable with…
Be Prepared
Provide proof of funds if you are paying cash, or a solid pre-approval if you are financing...with a local lender. Skip the internet with the do-it-yourself pre-qual that you can fill in the blanks.
If you are financing, try to put as much as you can down on the loan, as that will make a difference to the seller. The less of your own money that you put toward your loan, the less chance you have of winning the bid.
Sellers do look at your financing terms in addition to your offer terms.
Keep the contract clean...that means try not to ask for any concessions like closing cost or longer closing date etc.as sellers in this market are looking for a buyer that will close without asking for favors.
Don’t jeopardize your money…
There are many buyers chomping at the bit for a house that are willing to take chances. They are willing to remove all contingencies…and sometimes they have agents that encourage that.
If you have deep pockets, then sure you can waive the appraisal and come out of pocket for the difference. But even if you can afford the extra cash, it is smarter to cap your exposure by placing a limit on your contribution in case the appraisal comes in “short”...less than your purchase price.
If you choose to waive your financing contingency, don’t do it, unless you have all the extra cash available. You don’t want to forfeit losing your escrow deposit if expectations don’t go as planned.
Waive your home inspection? Oh please no! We have discovered too many deal breakers during a home inspection and would never recommend not doing one. Don’t let anyone talk you into it.
Last but not least…
Don’t get discouraged. Many buyers are making several offers before they land a deal...you are not alone on this.
Don’t fall in love with the house until you close on it and don’t despair if you lose out...there is always another property to buy.
For Expert Buyer Representation, Call or Text Buyers Broker of Florida 727-202-9130.
