So your real estate agent has called you and says your bid is just one of many that the listing agent has received on the Southfield foreclosure. He says you need to give your highest and best offer.
"Highest offer" means highest price. But highest price doesn't always win.
"Best offer" comes into play now. "Best offer" means the easiest type of offer to close. "Best offer" means the least number of possible obstacles. So I am going to list the "best offers" in order.
- Cash offer with no inspection
- Cash offer with inspection
- Conventional mortgage with large down payment with no inspection
- Conventional mortgage with large downpayment with inspection
- FHA mortgage with no inspection
- FHA mortgage with inspection
- 203K mortgages, or any mortgage that is out of the ordinary. Banks and listing agents get nervous about specialty loans. If the listing agent doesn't use the loan a lot or unsure about the closing potential they are going to recommend to the bank to go with a different offer.
I have seen cash offers with no inspections win over a FHA inspection when there was a $25,000 difference. So when you are putting in your "highest and best offer" think about what I said above.