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Why The Highest Offer Doesn’t Always Win

September 13, 2023

In the world of real estate, most people think the highest offer ALWAYS wins. Well, that’s not the case. Securing the winning bid on a house isn’t always as straightforward as accepting the highest dollar amount. In our experience, there have been countless scenarios where the highest offer wasn’t the one accepted by the seller—This is because the highest offer isn’t always the strongest buyer. Several factors come into play when considering an offer acceptance.

Closing Date

The closing date can play a significant role in offer acceptance. If the buyer needs to move quickly or has a specific timeline in mind, a higher bid with a longer closing period or no flexibility might look very unappealing. A buyer with secure financing that is flexible in their closing timeline might have the upper hand. In a situation where a quick closing is necessary, Homestead Financial Mortgage can help. We offer our 14-day Fast Track program to make a closing happen quickly.


Many real estate transactions come with contingencies, which are conditions that must be met before the sale can proceed. These might include things like inspections, appraisals, or the sale of a current home. If your bid is the highest but has numerous contingencies, sellers might see that as too many opportunities for the sale to fall through. Our Recast option allows a buyer to make an offer without having to make their offer “contingent.” In today’s market, this is critical since many sellers are unwilling to accept a contingent offer.

Appraisal Waivers

One of the strategies buyers might use to win an offer is an appraisal waiver – this removes a potential sale holdup. An appraisal contingency is a clause in the contract that protects both the buyer and seller if the appraisal does not come back at the expected value. A contract can sometimes be structured not to have an appraisal contingency or, better yet, to have an appraisal waiver. This can make an offer stand out because there is less risk of any surprises that could cause the deal to fall through.

If an appraisal is needed, Homestead can help. We own our Appraisal Management Company (AMC), ensuring quality appraisers do the inspections. We also never collect upfront appraisal money. We aim to make the appraisal process quick and easy for all parties involved.

Cash is King – Financing Matters

No matter how high your offer, if you depend on a lender to provide the home financing, in the eyes of a seller, there is always the possibility of the funding falling through. This is why many sellers seek and prioritize buyers with strong financial backing and those who are offering cash. Keep in mind that it is possible to make a cash offer to win a bid and refinance your home after the purchase. This strategy is called Delayed Financing. By making a cash offer like this, you can possibly offer less on the house and still be ahead of the competition simply by not requiring financing.

Emotional Connection & Selling Motivation

For many, buying and selling a home isn’t just a financial transaction – it’s an emotional one. This may be a home that the seller has lived in for 30 years, raised their family in, and had countless memory-making get-togethers. A seller like this might prioritize a buyer who will appreciate and care for the property as much as they did. Understanding why a seller is making a move could also help you know how to structure your offer. Whether it’s needing to move ASAP or just wanting the home to go to a new growing family – you may have a better chance of getting your offer accepted if you can connect with the seller.

While offering the highest bid on a property may be a common strategy, there are other things that a seller may consider when choosing an offer on their home. If you’re thinking about buying and want to increase your odds of winning an offer, reach out to your Homestead Financial Mortgage loan advisor today to learn more about how we can help. We have some great programs, options, and strategies to offer.

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