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Best Doesn’t Mean Highest – The Truth Behind Multiple Offers

Bank owned listings are accounting for almost 50% of the sales in the Big Bear area.  Multiple offers are becoming the norm on these aggressively priced properties and the buyers are having to learn a new strategy of making offers and counter offers.  Gone are the days of endless counter offers back and forth between the buyers and sellers.  Receiving a best and final counter offer is what a buyer can usually expect and there are some things that you should know when responding to these bank counters.

Highest offer doesn’t always win

Usually when an item is up for bid or auction, the seller takes the highest offer they get.  The seller gives buyers the chance to outbid their competitors and win the prize.  For the most part this is the case with real estate as well.  Nine out of ten times the bank will pick the offer that Nets them the most in the shortest amount of time.  However, real estate also has certain nuances, and just because an offer is higher in price, it is not necessarily the best offer on the table. The following factors, in no particular order, are also part of the terms and criteria that Banks use to pick through the multiple offers:

  • Escrow Length
  • Strength of buyers
  • Type of Loan
  • Cash Buyers
  • Deposit
  • Closing costs being paid
  • Etc.

Why the Bank doesn’t always take the Highest Offer

A buyer using a loan to purchase a property can’t assume they will blow the competition out of the water with a ridiculously high offer.  There are numerous reasons that a higher offer will not be accepted.  Some of these reasons are:

  • Appraisal Issues
  • Ability to qualify for the loan
  • Condition of Property
  • There is an Equal or Competitive Cash Offer on the Table

If you can make a Cash Offer, Just Do it

Many times, Cash is King when dealing with multiple offers.  If you have the means to pay cash for a property, even if it is not your original preference, you need to pull that card out on your best and final offer.  Don’t give someone else the chance to do that themselves.

Also, don’t make an offer using a loan for the purchase assuming that you can change it to cash after the best and final counter.  If you can pay cash, offer that way right away. You will instantly give yourself an upper hand on the other non-cash offers.  In the past few weeks alone I have personally seen banks reject higher offers because of reasons previously mentioned here.  They took the cash over the higher offers with loans.

It is more important now than ever before to use an agent that is experienced in these types of transactions. When selecting a buyer’s agent for a Bank owned property in Big Bear, make sure to ask about their experience selling bank owned offers and more importantly multiple offers.

Joe Pecoraro


  1. Hi Joe,

    Great Article and information…. if ALL agents educated their clients to the reality of the market there would be a lot fewer unhappy buyer’s out there.

    I can’t count the times I have heard people complain about the loss of a deal only to learn that they had unrealistic and uneducated expectations. What’s worse is that often their agent made it worse by not telling them the truth.

    Great Job!


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