Highest and Best Offer: How to Win a Bidding War

How to Win a Bidding War

Everyone wants the most money and the best terms they can get when selling a home. Especially in a hot sellers market, there are times when you may be asked to make your highest and best offer. In these situations it’s imperative that you know how to win a bidding war so that you can ensure you get the home you want.

What Does the Highest and Best Offer Mean?

The phrase “highest and best offer” is used by listing agents to inform buyers that there are multiple offers on a property. Listing agents use this as a way to encourage buyers to update their offer and terms to be more attractive to the seller.

How Do You Win a Bidding War?

Don’t be afraid! Sellers don’t always pick the highest offer, but sometimes the best offer!  Luckily, there are ways buyers can have a fighting chance to avoid being outbid on a house. They just need to be creative and make their offer the most attractive. Here’s how to win a bidding war situation.

1. Offer “Cash”

Cash is king because it avoids any requirements from a lender. Lenders usually hire a third-party to perform an appraisal valuation of the property. If the appraisal does not meet or exceed the purchase price, the lender could disapprove financing and the buyer will lose the deal.

2. Be Prepared To Make a Quick Offer

There are some cases when a seller won’t wait too long to review multiple offers. In a hot market, houses can go under contract after a few hours of being listed! Therefore, it’s imperative to be prepared to make an offer at a moment’s notice. 

3. Add an Escalation Clause

Going back and forth with increasing offer prices in a bidding war can be exhausting. Including an escalation clause in the purchase agreement puts the bidding war on autopilot.It takes out the guessing game of choosing an amount while presenting an offer within a buyer’s comfort level.

4. Waive the Whole House Inspection

Waiving a whole house inspection makes an offer more attractive. It removes the buyer’s ability to negotiate if there is an issue with the house. The buyer will be purchasing the house “As-Is” with no repairs required from the seller.

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