Countering "Best and Highest" Offer

9 Replies

I'm looking for strategies to counter when a seller offers their "best and highest" offer. I know there are some fantastic negotiators out there so I would love to here some tactics. I'm in negotiations right now and have hit this wall. I'm more than likely going to take the deal because the numbers still work great but my type A personality hates not having the last word!

I guess it kind of depends on the property, it's location and condition, and your evaluation.

I was recently in a similar situation where the Seller asked for best and final from myself and another potential Buyer.

Awesome property, killer location, even better price, numbers worked (little bit of a red flag, but hey, give it a go and see what happens, right).

I went in with a cash offer at full asking price plus a dollar, and removed all contingencies and other asks other than the inspection. Offer got accepted. Ended up walking away from the deal based on the inspection.

So, that's one approach, but only if it makes sense based on your prior due diligence.

Use a specific number... something like 139,035.89  if you google it Harvard Business Review has articles that talk about this and why types of numbers to use etc. Then have your realtor push it through and defer to higher power... my client would love to pay more but based on the condition and work needed this is the highest he can go based on the bank.

Another good option (might be hard now) is do some digging to see why they are selling, if it's time sensitive (divorce) then you could make that offer more valuable by making it easy. 30 day close, 2wks inspection, let them keep security deposit/full rent for month of whatever...

Thanks @Matt K.  and

@David O. Always looking for tips to improve my negotiating. I'm hopeful that this one will push through. I did get them to agree to fix some issues even before the home inspection so we'll see what happens. Waiting for their counter to come back. 

In future get $ back to fix stuff, typically that's better because you can make sure it's done correctly (or keep it if it's not urgent..) Plus you can sell it as making it easier on them...

@Ben Sears Say OK you win. I will pay you  $X if you   .   .   .  then ask for some other concession. That concession could be money like funds towards closing or terms like extra time to settle or for inspections.

Originally posted by @Matt K. :

Use a specific number... something like 139,035.89  if you google it Harvard Business Review has articles that talk about this and why types of numbers to use etc. Then have your realtor push it through and defer to higher power... my client would love to pay more but based on the condition and work needed this is the highest he can go based on the bank.

Another good option (might be hard now) is do some digging to see why they are selling, if it's time sensitive (divorce) then you could make that offer more valuable by making it easy. 30 day close, 2wks inspection, let them keep security deposit/full rent for month of whatever...

 Top 10% real estate agents do that latter paragraph as a matter of course. They will try to get the listing agent talking -- most agents LOVE to talk -- and tailor the offer specifically to the seller's motivation. This isn't unethical or anything, because the listing agent is helping the seller get what they want. 

I agree with what Ned said - come up with another parameter/factor to bring into the deal, in exchange for a higher offer (if you have done your due diligence, and think this deal might make sense at the higher price). Obviously, the one contingency you never give away is inspection, because who knows that will uncover, but we can think creatively of other things.

We won on an SFR here in the LA area, despite not having the highest offer. It was a deal I liked for buy and hold, with a few renovations. We offered $525K on an asking price of $535K (we thought about going for lower, but this is an emerging area with a lot of interest, and we knew below that was unlikely. The seller ended up getting two offers above the asking price, for $540K and I think $544K or maybe even $545K, can't recall. Both of those were at 20% down.

The seller asked if we would move up to $540K. We said no, but we did up to $535K because we figured it was worth it based on comps and the monthly rents we could get. We were putting 25% down, which helped. We also came in with 2 pre approval letters, when I think other buyers had just one, and we informed the seller's agent that we had done full documentation pre approvals with both very recently, which would mean a quick closing, and we encouraged them to confirm with the loan officers. This all helped push the deal through - point being, extra preparation and showing you are even more qualified, can be a great negotiating point. 

Originally posted by @Ned Carey :

@Ben Sears Say OK you win. I will pay you  $X if you   .   .   .  then ask for some other concession. That concession could be money like funds towards closing or terms like extra time to settle or for inspections.

@Ned Carey  I like this. I try to ask for something every time I get a counter as a matter of course. So far our negotiations have been: 

List price: $54900

I offered $42500 and was countered at $50k. Inspection for information only. 

I countered at $45k and requested some broken windows be fixed despite the inspection

The seller held at $50k including the window repairs. 

My final offer was $50k and I negotiate the inspection report or take the $45k and I'll take the property "as is" with the requested repairs. 

I haven't heard back but perhaps tomorrow. Luckily, $50k still works well for me as a rental. The unit is already rented and cash flowing. 

You should never want the last word.  Ideally your negotiation should end with the other side countering you with a number/terms that you want and were trying to get them to.  This helps give you leverage later on if you need further negotiation after an inspection or need something like an extension.