If you are buying or selling a home in today’s market, you may come across the term “Highest and Best Offer” or “Please submit your highest and best offer”. What exactly does that mean?
In the current market conditions, buyers are facing multiple offers on the homes they are interested in writing an offer for. Seller’s are also navigating multiple offers and want to be able to ensure that they get the most attractive offer when selling their homes.
Highest and Best Offers essentially mean that the buyer should put their best foot forward. They should offer the highest dollar amount they are willing and/or able to offer as well as present and offer with the most appealing contingency situation for the seller. I do not recommend waiving home inspection or other contingencies for my buyers, however, sometimes to win in a multiple offer situation, buyers find it necessary to waive their inspections. This is great for the seller and seller’s definitely look at the whole picture when reviewing and deciding on the winning offer.
Is the highest sales price always going to win in a multiple offer situation? No, not always. The listing agent and the seller should be reviewing the contracts as a whole and taking contingencies and even the closing date into consideration when making their final decision.
I’m often asked by buyers what they should offer. I usually tell them that the offer they submit should be one which they don’t regret if they win or lose the house. If they offer a substantial amount over the list price to win, at the end of the day, if they are the winning offer, that sales price offer should be one they are ok with paying for and won’t feel like they have any regrets afterwards. If they lose the house because they didn’t offer enough or someone else had waived contingencies, the buyer should also be ok with losing the house.
A buyer should feel like they put their best foot forward and be ok with the outcome either way.