Highest and best are not always the same. Price is only half the story

When a seller asks, “Which offer is the best?” most people assume the answer is the largest number. It feels natural. The highest prize wins.

But after 40 years of coaching real estate agents in this industry, I can tell you that the highest bid and the best offer are not always the same. The real estate professional who understands the difference is the one who protects the seller and actually brings the deal to the closing table.

Here’s the way I teach agents: Think of an offer like an applicant. The salary they ask for is the price. But you would never hire someone based solely on salary. You want to know if they’ll show up, if their references are accurate, and if they can do the job without falling apart in the first week.

The terms of the contract are the CV and references. They will tell you whether this buyer can actually meet the quantity they wrote down.

And the truth is, the number means nothing if the transaction never closes. According to the National Association of Realtors most recent broker confidence indexAbout 5 percent of contracts were terminated in the last three-month period, and about 14 percent had deferred settlement.

NAR has found consistently that the issues that derail or delay a sale come from the same handful of places: home inspections, buyer financing, and appraisals. This is all a matter of terms and not price.

So let’s take a look at what you should actually read in a listing and how to explain it to your seller.

Does the buyer have a house that needs to be sold?

The first question is whether this buyer needs to sell their current home to buy yours. A home sale contingency ties your closing to a second transaction over which you have no control. That’s not automatically a dealbreaker, but it changes the risk, and your seller deserves to understand this. This is how I would frame it:

“This buyer offered a strong price, and there’s one thing I want you to understand. Their offer depends on whether they have to sell their own home first. So we’re not just betting on this buyer. We’re betting on a buyer we haven’t met yet, for a house we haven’t seen yet. Let’s discuss whether that’s a risk worth taking, or if we’re asking them to fortify it.”

How strong is the financing?

A price is only as good as the loan behind it. Is the buyer pre-approved or just pre-qualified? Those are not the same things. What is their credit photo and how much are they spending? Just as important, who is their loan officer?

An experienced local lender that everyone in your market knows and trusts is worth real money to your seller, because that lender will ensure that the file is closed. A name that no one recognizes from an online portal is a question mark. You can ask.

“Before we celebrate the number, I want to make a few phone calls. I want to know who is writing this loan and if they have true pre-approval or just pre-qualification. The price on paper doesn’t matter if the financing falls apart in week 3.”

What contingencies are they asking for?

Every contingency the buyer keeps is a door through which he can walk out. Inspection, valuation, financing, lawyer research, the sale of their own home. Some are completely reasonable. But you and your salesperson need to know exactly which doors are open and what it will take to close them.

Interestingly enough, NAR’s latest data shows that buyers are less likely to waive contingencies than a year ago, with about 17 percent waiving the inspection contingency, so a clean offer is more noticeable than it used to be.

Does the closing date match?

This is constantly overlooked. A great price for a great contract can still be a bad offer if the buyer wants to close in three weeks and your seller needs 90 days to find their next home. Or vice versa.

Timing is a term, and it is a term that your seller experiences in their daily life, not just on the settlement statement. Always ask what date the buyer wants, and whether it syncs with what your seller actually needs.

What kind of inspection will there be?

Here’s a quiet one that can blow up a deal late. There is a real difference between a buyer who inspects the roof, foundation, systems for major defects, and a buyer who blows every cracked exhaust cover and asks for credit for everything.

You do not always know in advance, but the purchasing agent and lender often give you an idea of ​​who you are dealing with. A reasonable inspection attitude is a concept worth understanding.

This cuts both ways

If you are the listing agent, your job is to research the entire listing, not just the top line. Who is on this buyer’s team? Which bank do they use? Which inspector? You would have to pick up the phone, learn those answers, and then translate them into plain language for your salesperson.

And if you are the purchasing agent, this is your opening. When you make a bid, don’t just give a number and hope. Make a case for your buyer’s terms. Tell the listing agent that your buyer is fully insured, that their lender is closing on time, that they are flexible on the date, that they won’t chase every little repair.

Strong terms are a competitive advantage, and a buyer’s agent who packages and validates them is doing real work for their client.

A high price attracts a seller’s attention. Solid conditions ensure that they get to the closing table.