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Best and Final Offer Strategy - YouTube
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in this video we will discuss what it
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means to be in a best and final
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situation in the real estate world
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when and why it's used as well as three
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strategies to help you get your offer
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accepted
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here we go
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so what is it in real estate the best
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and final situation
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is when a seller sets a deadline to
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receive all offers from interested
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buyers
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this gives the buyers who are interested
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in purchasing the home an opportunity to
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put their best foot forward with their
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offer in an attempt to get it accepted
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and then purchase the property
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a seller may call for best and final
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when they receive multiple offers and
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instead of countering each one
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individually
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they'll avoid the back and forth
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negotiation and ask for each buyer to
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give their best offer with best possible
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terms
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it's important to note that typically
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when best and finals called for
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you will not have the opportunity to
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revise your offer after the deadline
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nor will you be afforded a counteroffer
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so the house you fell in love with is
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calling for best and final
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before we explore the strategies
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available to help you get your offer
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accepted
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it's important that you fully examine
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your finances and the market in order to
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understand whether or not is a good time
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for you to purchase
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with the market being very competitive
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the best and final offers are usually
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thousands above the original asking
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price of the property
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it is highly recommended that you
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understand your monthly budget in
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comparison to your total spending
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because the amount of mortgage you may
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qualify for may not take into
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consideration your lifestyle choices
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for example if you like to go out to eat
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every day or take several vacations a
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year
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you may want to budget for those items
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before committing to 30 years worth of
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the same payment
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unless you sell of course in which case
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you call me
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with interest rates being at historic
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lows it has caused a lot of buyers to
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enter the market
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because they have more buying power but
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that does not necessarily mean that
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rates will stay this way forever
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there is a ton of controversy about
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whether or not home values will continue
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to rise or decline
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but everybody seems to be on the same
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page about interest rates ticking upward
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depending on the scenario if the
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interest rates rise despite a slight
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decline in the home prices
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you may have the same or higher monthly
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payment
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definitely evaluate your personal
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circumstances before entering the
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housing market
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once you've decided to buy a home here
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are some strategies you can use to get
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your offer accepted should you find
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yourself
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having to submit a best and final offer
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strategy number one
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is figure out what the sellers need
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every homeowner has different
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circumstances
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in which they are selling some people
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are relocating out of state
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need a bigger home need a smaller home
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plus a family member
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you're getting divorced you get the idea
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each circumstance may
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make certain terms of your offer more
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appealing or less appealing to the
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seller
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for example if the house you're looking
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at is an estate where the executor does
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not live close by
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and the house needs some work the seller
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may prefer an offer that can close
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quickly and for cash
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so as to avoid any lender required
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repairs and maintenance to the property
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while they're waiting for it to close
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alternatively
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if the seller's buying another home
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while they're selling an offer that
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allows them to close on the house
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and then rent the house back until they
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secure housing
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or which has a more flexible closing
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date might be more appealing
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oftentimes there's a misconception that
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if someone can close quickly with
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cash offer the seller will be more
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likely to accept a lower offer in price
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unfortunately this is only true in
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situations where the seller values
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the quickness of receiving the funds
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over the amount of funds
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when it comes to the closing table
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whether it's a mortgage offer or a cash
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offer
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the seller still receives cash
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regardless so if you ask a seller if
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they would wait an additional two weeks
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and receive a more substantial amount of
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money on their property
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the majority time they will wait
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strategy number two
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is minimize contingencies the new jersey
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real estate contract has several
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contingencies built into it in order to
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protect buyers from getting in over
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their heads on their home purchase
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the two most people are familiar with
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are the home inspection contingency
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and the mortgage contingency if you're
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not familiar with these
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the home inspection contingency states
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that the contract may be canceled in the
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event an agreement cannot be
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reached with respect to repair requests
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that have come about from the home
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inspection
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the mortgage contingency says that if
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the buyer is unable to obtain a mortgage
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or if the house does not appraise and an
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agreement cannot be met
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the contract may be canceled in order to
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make your offer more competitive
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you can elect to waive certain portions
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of these contingencies
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for instance some people are choosing to
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waive the home inspection and appraisal
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of their offer
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now if you're not savvy about parts of
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the home or do not have a hefty down
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payment
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i do not advise waiving both of these in
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their entirety
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a less strong but still effective option
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is to limit the inspection and appraisal
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waivers
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for instance with regard to the home
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inspection you can say you only make
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requests on major structural or
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environmental issues
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and on the appraisal you can say you'll
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cover up to a 10
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000 difference if the appraisal comes in
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low this gives the seller confidence
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that they will not have to be heckled
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for minor repairs
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and they will be guaranteed a certain
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amount for their home i cannot stress
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this enough
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if you do not have additional funds on
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hand to be able to make potential
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repairs
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or cover an appraisal gap please do not
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overextend yourself
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budgeting is so important as i mentioned
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previously
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i did a video last week with my
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financial advisor suniq patel
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check him out to get some advice as to
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how to best approach this with your
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specific circumstance
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before we move on to strategy three one
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more contingency i will mention is the
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buyer home sale contingency
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if you're a buyer who's also selling a
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home it is ideal to have your home on
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the market and have a contract secured
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before you start looking at homes to buy
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if you feel rushed by doing the process
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this way there are lenders out there
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that offer bridge loans
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this allows you to pull the equity from
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your current home in order to buy the
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next house
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so you can get settled in there before
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selling your home
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again please check to make sure this
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option makes financial sense for you
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based on the payment that you'll have
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with the bridge loan
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strategy number three is don't be afraid
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to throw your hat in the ring
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sometimes with the competitive nature of
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the best and final situation
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people can get overzealous and they
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realize they do not actually want to
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purchase the home after their offer gets
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accepted
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in order to get out of the deal
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oftentimes they'll nitpick on the home
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inspection
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the transaction will fall through and
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here's the best part
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potentially give you the second
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opportunity to be next in line for this
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house
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for this reason i recommend throwing
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your hat in the ring even if you're not
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the highest offer because the first
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offer may fall through
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and give you the opportunity to lock in
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the home that you love
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now disclaimer does this mean i think
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you should offer a low
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offer when you know the seller has
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several over asking
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absolutely not that would be like
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wearing mittens into a boxy ring
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and just don't do it so that's best and
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final offers in a nutshell
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if you would like a one-on-one
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consultation to go over any questions
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you may have
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please feel free to book a one-on-one
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zoom call through the link in the my
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description
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join me here next week as we'll discuss
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the market trends in central new jersey
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area
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have an amazing week see you then
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bye
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