Multiple offers in Wellington Florida have become common place again and home buyers are being instructed to submit their “highest and best” offers. While “highest and best” offer defines itself, as a Wellington Florida Listing Agent I do not think every home buyer fully understands what it actually means.
Lately, all of the “highest and best” offer situations I have been involved in seem to have one constant commonality, buyers are increasing their purchase price, but do not change any of the other offer terms; escrow, inspection period, close date, mortgage contingency period or short sale contingency period. While a buyer can have the “highest” price, if their other terms are not the “best” they could possibly lose in a multiple offer situation.
A few months ago one of my Wellington home sellers received 8 offers and once the “highest and best” deadline came to a close the seller quickly narrowed it down to the two strongest offers. The two offers were identical, except for the inspection period, one buyer offered a 5 day inspection period while the other offered 3 days. Guess which offer the seller accepted? Yes, in this “highest and best” multiple offer situation it came down to a two day difference in the inspection period.
If you are a home buyer purchasing a home in Wellington Florida you better be prepared for battle! Make sure you fully understand every term you are offering the seller and how those terms may affect your chances of winning in a multiple offer situation.
DO NOT just submit your “highest” offer, make sure you submit your “highest AND best” offer.
DO NOT think the only term that matters to the seller is price because when a seller receives 10 offers with the same purchase price it does come down to the other terms. If you can do the inspection in 2 or 3 days don’t put 10 days.
DO NOT say you will shorten the inspection period or will put more money in escrow, do it! Often times in a multiple offer situation the seller is looking at what is in writing, NOT what a buyer says they will do.
DO NOT submit an offer with outdated proof of funds or no proof of funds at all. When a seller has 5 other offers on the table that are just as strong as yours they most likely will not wait for you to provide current proof of funds.
Below is an example of the types of offers I am seeing in “highest and best” multiple offer situations with a list price of $200,000, if you were the seller which offer would you choose?
|Offer #1||Offer #2||Offer #3||Offer #4||Offer #5|
|Mortgage Contingency||0 days||30 days||0 days||45 days||0 days|
|Inspection Period||10 days||7 days||3 days||5 days||7 days|
|Close Date||30 days||60 days||30 days||45 days||21 days|
In my experience most Wellington sellers would accept offer #3. While offer #4 has the highest offer price the buyer is also asking for a $10,000 seller concession, so they are essentially offering the seller $200,000, NOT $210,000 and it’s contingent on obtaining financing.
Offer #3 does not have a mortgage contingency, has the highest escrow deposit, shortest inspection period and while it doesn’t have the shortest close date these particular cash buyer might be more than happy to close quicker if the seller wants them to.
Which offer did you choose?