In beach real estate, it’s common for the listing agent to ask buyers for their “highest and best offers.” Glenn Phillips, CEO of Beach Homes Realty, discusses what you should know about these offers.
- Not an auction! Contrary to popular belief, real estate transactions aren’t an auction. Here are a few reasons why:
- Highest $ may not win. Money isn’t the only part of the transaction, so the highest bid may not win.
- Seller selects their buyer. Sellers aren’t obligated to take an offer and aren’t required to sell.
- Look to “de-risk the deal.” Remove things that could cause the deal to fall apart and cause you to start over again.
- Cash versus mortgage. At the end of the transaction, mortgage companies always give the seller cash. However, mortgages must be approved and may fall apart, while cash can be a more secure option.
- Timeframe might be important. Some people need to move quickly, while others are more flexible in their timing. Knowing what each side wants can help factor into your offer with important timing factors.
- Size of earnest money. Earnest money deposits show intent and how serious the buyer is. Offers that include earnest money should be taken seriously since the buyer invested capital.
- Fewer contingencies. Sellers notice when you submit an offer with several contingencies with the intent to renegotiate. In fact, sellers may take a lower offer with fewer contingencies to avoid headaches.
- Simplicity. Complex deals can work but may feel risky to someone not used to transactions. Deals need to be comfortable for the seller, buyer, and agents. Sometimes, sellers choose the easier-to-understand offer over the more sophisticated ones.
When submitting your highest and best offer, remember these tips for a better transaction. Visit beach-homes.com to connect with expert beach agents ready to guide you through beach real estate.