Is It True That Sellers Don’t Always Pick the Highest Offer?

[Myers Jackson]

Many buyers assume sellers will always take the highest offer, but that’s not always the case. Sellers carefully consider not just the price, but also the terms that come with the offer. For example, if a buyer offers well above the asking price but only puts down 5%, the seller may reject it if the property doesn’t appraise for that higher amount. This is because financing could fall through if the appraisal is low, putting the deal at risk.

On the other hand, an offer that finances the purchase “like cash” with 20% to 25% down and non-refundable terms can be more appealing, even if the price is slightly lower. Sellers value these types of offers because they are more secure and less likely to fall apart. In fact, sellers often choose offers with better terms, such as larger down payments, quicker closings, or non-contingent agreements. These terms reduce uncertainty and make the sale process smoother.

Sellers may also prioritize offers with fewer contingencies or ones that don’t require them to fix issues. This reduces delays and headaches during closing.

In short, the best offer isn’t always the highest bid. It’s the offer with strong financial terms and reliable conditions that give the seller confidence. Buyers should understand this and structure their bids accordingly to improve their chances of winning, especially in competitive auction environments.

[Brendan Mullenholz]

Quote from @Myers Jackson:

Many buyers assume sellers will always take the highest offer, but that’s not always the case. Sellers carefully consider not just the price, but also the terms that come with the offer. For example, if a buyer offers well above the asking price but only puts down 5%, the seller may reject it if the property doesn’t appraise for that higher amount. This is because financing could fall through if the appraisal is low, putting the deal at risk.

On the other hand, an offer that finances the purchase “like cash” with 20% to 25% down and non-refundable terms can be more appealing, even if the price is slightly lower. Sellers value these types of offers because they are more secure and less likely to fall apart. In fact, sellers often choose offers with better terms, such as larger down payments, quicker closings, or non-contingent agreements. These terms reduce uncertainty and make the sale process smoother.

Sellers may also prioritize offers with fewer contingencies or ones that don’t require them to fix issues. This reduces delays and headaches during closing.

In short, the best offer isn’t always the highest bid. It’s the offer with strong financial terms and reliable conditions that give the seller confidence. Buyers should understand this and structure their bids accordingly to improve their chances of winning, especially in competitive auction environments.

 Highest isn't always best especially in the DC area. Contingencies, closing DP etc.. are heavily looked at.  Like you said about down payments; a lower price with 20% down is stronger than higher at 5%.  Also if they have an appraisal contingency in there you're rolling the dice.  Outside of price, match up the offer with the seller's needs.  And don't be afraid to counter a lower offer with better terms.