Profile picture for dimi3903

How do you make your "Highest and Best Offer" on a REO property?

  • July 27 2010 - Providence Township
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Answers (10)

Best Answer

Reo like any other only requires making an offer. You select the agent and he or she writes it up. If you choose not to have your own agent that is fine. The listing agent can write it up without any extra charge to you. As for what price then that depends on what you qualify for and how much you are willing to pay.
  • July 27 2010
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This is a re-post of my earlier reply. I fixed the continuation link.

If you have been making offers on bank owned properties lately you have probably heard the term "highest and best offer". As in "this is a multiple offer situation. Please submit your highest and best offer by noon tomorrow". A lot of buyers automatically assume the highest offer (most money) is the best offer, but that isn't always the case.

Many buyers can't believe they got out bid even though they offered more than the asking price. My foreclosure listings routinely get multiple cash offers above asking price. A typical offer for a foreclosed property will be for cash somewhere near the asking price, a 3% to 10% earnest money deposit, and 5 to 15 day inspection period. Competition for these properties has gotten tough lately. I am going to offer a tip that will make your offer much more competitive and more likely to get accepted. Continued here

  • October 14 2013
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If you have been making offers on bank owned properties lately you have probably heard the term "highest and best offer". As in " this is a multiple offer situation please submit your highest and best offer by noon tomorrow".  A lot of buyers automatically assume the the highest offer is the best offer, but that isn't always the case.

Many buyers can't believe they got out bid even though they offered more than the asking price. My foreclosure listings routinely get multiple cash offers above asking. A typical offer for a foreclosed property will be for cash somewhere near the asking price, a 3% to 10% earnest money deposit, and 5 to 15 day inspection period. Competition for these properties has gotten tough lately.  I am going to offer a tip that will make your offer much more competitive and more likely to get accepted.
Continued

  • April 23 2011
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Profile picture for sunnyview
"It kinda plays with your mind a little bit.  You begin to ask yourself whether or not you already had the highest bid, and where the other bids are."

Really true. It does make you a little crazy. My relative recently tried to buy in city with lots of bank owned houses. He got the highest and best bid line from the bank and was going to up his bid about 10% to try to "win" the house. I asked him if they house was really worth that much. He said no and added that he hated the floor plan, but thought that he could deal with it if it was cheap. I did point out that 10% over the last bid was no longer cheap, but he submitted his bid anyway. lol 

Best and highest means different things on different houses. Ask your agent for guidance on what the house is really worth and then structure your bid the best you can.
  • July 27 2010
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A Best and Highest counter-offer from the Seller does not ALWAYS mean that all bids are close.  In my experience, best and highest is almost always the case in foreclosures when there are multiple bids.

It kinda plays with your mind a little bit.  You begin to ask yourself whether or not you already had the highest bid, and where the other bids are.  The Seller is simply trying to get just one more dollar (figuratively) from the buyer - even if their bid was already the highest.  As already mentioned, 'terms' can make a lower dollar amount bid look better (all cash, no inspections, quick closing, no closing costs etc...)

Cash is king, but only to a certain point.  A $50k all cash offer will be scoffed at on a $100k property.  While an $85k financed bid would look much better.

Get a good agent, have him/her run the comps and bid what you feel most comfortable with.
  • July 27 2010
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Profile picture for dimi3903
I am a first time home buyer. I am trying to purchase a VA owned property. I made an offer and there are multiple offers on this property. So they are asking for a "Highest and Best Offer", because all the offers are very close. Is there any pointers you could give me on how to proceed? Does the VA favor any particular points in an offer?
  • July 27 2010
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I agree with everyone just wanted to add have your agent do some comps you do not want to pay more then the house is worth. 
  • July 27 2010
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Profile picture for sunnyview
Best and highest is a way to make buyers offer more money for a house because presumably more than one buyer wants it. Your best highest might be more money, but it can also be a combination of other factors like the type of financing, waiving inspections or repairs, an all cash deal, a larger down payment/deposit or a quick close.

You need to decide how much the house is worth and bid that. Making the deal as clean as possible can give you the edge even if you are not willing to be the highest bidder. It is never worth overpaying just to beat out the other bidders. Let them overpay and go on the the next property.
  • July 27 2010
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Very simple.  You decide what the highest amount you will pay for a property.  Then decide how quickly you can close, how much earnest money you are willing to risk and any other terms that you require.  Then put it in writing, preferably on the local contract forms for your state and forward to Seller or Sellers Agent.

If you are unsure as to any of these items hire a local agent to help you and represent you through the process.  You will have a professional on your side and it will likely cost you nothing.

Or you can just roll the dice.
  • July 27 2010
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Profile picture for Ofe Polack
You find yourself a good buyer agent who is familiar with the area where the property is located, study the CMA and go for it!
  • July 27 2010
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