Let me talk about what that means within the Santa Clarita Valley Communities where real estate is concerned.
Highest and Best
This is a test or counter offering process that was prevalent in the past Foreclosure and Short Sale market within the Santa Clarita Valley.
It was a way for the banks to get a higher than listed price, plus to have the buyers step up with their best possible financing options.
The same applies to the real estate sellers in the housing market. With multiple offers, they are able to use this scenario to their advantage.
When it comes to buying Santa Clarita real estate – this option is understood as being the Top Offer, with the best financing a buyer can acquire.
First Test – Highest Offer
This is the first part of the test. Highest Offer. Making your offer the highest in the “net” proceeds of the real estate seller.
If you offered, for example, $500,000 for their home, and if the comps support that and higher, consider this.
For every $10,000 you finance, it only changes your monthly payment approximately $50.00 a month. That is $50.00 a month for every $10,000 you finance.
An extra $10,000, in a competitive market, may mean the difference between you being able to be in second place versus being in first place with the opening of escrow on the home you want to buy.
Second test – Best Offer
The Best Offer has to do with the type of financing you are using.
if you are conventional or even a cash buyer, you will trump most of the other offers in today’s Santa Clarita real estate market.
Considering the financing you are using, make sure your “approval” letter is totally solid. You may push for a full approval letter that is from the Underwriter. This is known as a Underwriter’s approval. It’s the strongest in the industry.
Even if you are using VA or FHA – when it’s accompanied by a Full Underwriter’s approval letter, you are very strong on paper.
Also to include your FICO Scores and credit report is a must when wanting to meet the Second Test of Best Offer when wanting to compose the offer.
Proof of Funds with BEST Offer
If you are going VA, FHA, Conventional or even Cash – you will want the “proof of funds” to be included with your offer.
These “screen shots” or “statements” will need to contain your name, mailing address, and other pertinent information. Your account numbers, because they are private, can and should be made illegible to the reader.
Love Letter with BEST Offer
Most offers in today’s real estate climate should include a Love Letter from the buyer.
The Love Letter and what it means has been talked about at length with our blog post.
Photos are worth a thousand words, as they say. Including your personal photograph, or that of anyone else who is going to be living in the prospective home, would be a benefit for you in today’s real estate market.
Don’t take real estate for granted
Having a guide who can give you all these tips is critical when wanting to buy homes and real estate in the present market.
I’m here for you when you are ready for real estate. Let me know and I’ll be here for you when you are ready to go forward with Santa Clarita real estate.