Highest and best aren't always the same. Price is only half the story

When a seller asks, “Which offer is the best one?” most people assume the answer is whichever number is biggest. It feels obvious. The highest price wins.

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

Here is the way I teach it to agents: Think of an offer like a job candidate. The salary they are asking for is the price. But you would never hire someone on salary alone. You want to know whether they will show up, whether their references check out and whether they can do the work without falling apart in the first week.

The terms of the contract are the résumé and the references. They tell you whether this buyer can actually deliver on the number they wrote down.

And the truth is that the number means nothing if the transaction never closes. According to the National Association of Realtors’ most recent Realtors Confidence Index, about 5 percent of contracts were terminated in the latest three-month period, and roughly 14 percent had delayed settlements.

NAR has consistently found that the issues that sink or stall a sale come from the same handful of places: home inspections, the buyer’s financing and appraisals. Every one of those is a terms issue, not a price issue.

So, let’s walk through what you should actually be reading in an offer and how to explain it to your seller.

Does the buyer have a house to sell?

The first question is whether this buyer needs to sell their current home in order to buy yours. A home-sale contingency ties your closing to a second transaction you do not control. That is not automatically a dealbreaker, but it changes the risk, and your seller deserves to understand it. Here 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 them selling 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. Let’s talk about whether that’s a risk worth taking, or whether we ask them to firm it up.”

How strong is the financing?

A price is only as good as the loan behind it. Is the buyer pre-approved or merely pre-qualified? Those are not the same thing. What is their credit picture, and how much are they putting down? 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 is going to get the file to closing. A name nobody recognizes from an online portal is a question mark. You are allowed to ask.

“Before we celebrate the number, let me make a couple of calls. I want to know who’s writing this loan and whether they have a real pre-approval or just a 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 they can walk out through. Inspection, appraisal, financing, attorney review, the sale of their own home. Some are completely reasonable. But you and your seller should know exactly which doors are open and what it would take to close them.

Interestingly, NAR’s latest data shows buyers waiving contingencies less often than a year ago, with about 17 percent waiving the inspection contingency, so a clean offer stands out more than it used to.

Does the closing date line up?

This one gets overlooked constantly. A wonderful price on a wonderful contract can still be the wrong offer if the buyer wants to close in three weeks and your seller needs 90 days to find their next home. Or the reverse.

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

What kind of inspection is coming?

Here is a quiet one that can blow up a deal late. There is a real difference between a buyer who inspects for major defects, the roof, the foundation, the systems, and a buyer who is going to nickel and dime every cracked outlet cover and ask for a credit on all of it.

You will not always know in advance, but the buyer’s agent and lender often give you a feel for who you are dealing with. A reasonable inspection posture is a term worth weighing.

This cuts both ways

If you are the listing agent, your job is to investigate the whole offer, not just the top line. Who is on this buyer’s team? What bank are they using? What inspector? You should be picking up the phone, learning those answers and then translating them for your seller in plain language.

And if you are the buyer’s agent, this is your opening. When you submit an offer, do not just hand over a number and hope. Make the case for your buyer’s terms. Tell the listing agent your buyer is fully underwritten, that their lender closes on time, that they are flexible on the date, that they are not going to chase every small 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 gets a seller’s attention. Solid terms get them to the closing table.