Most of the time, the highest offer wins the house - but that's not always the case. Here are four reasons why a seller might not choose the highest offer.
Another buyer brings an all-cash offer
A buyer who can pay cash will likely win out over a higher-priced offer. With an all-cash buyer there are no mortgages and lenders involved in the transaction, escrow closes more quickly, and an appraisal is not required. Cash offers come with less hassles and sellers love avoiding hassles.
The buyer with the highest offer isn't pre-approved for a mortgage
A common cause of deals coming apart before closing is that the financing didn't come through as the buyer expected. When a buyer is pre-approved for a mortgage, the mortgage broker or bank has confirmed that you're ready to buy in a certain price range and have been pre-approved for the loan.
The buyer with the highest offer cannot meet the seller's desired closing timeline
Agreeing to a closing timeline that meets the seller's needs can help seal the deal. Many sellers want fast closings, such as 35 or 45 days. If you can move quickly and the buyer with a higher offer cannot, you could win out. However, if the house the seller is buying won't be ready and the sellers need more time, your flexibility will be key to getting the house.
The highest offer has too many contingencies
Common contingencies are the home inspection, financing, and appraisal. However, every contingency you add has the potential to weaken your offer, even if it's the highest one. Make sure you really need each contingency before building them into your offer because an offer that is free of cumbersome contingencies is automatically more attractive.
Of course, you always want to go in with a strong offer, but the highest price isn't always what a seller is looking for. When you're ready to start your home search, we're here and ready to help.