A Full Price Offer Does Not Always Win Negotiations
Scott P. Rogers
I don't play poker regularly - though I have played it a few times lately with my kids. When I do play, I can become caught up in my excitement to see a strong hand. Wow! This pot is mine! I am bound to win this time! And often, that might happen with a strong hand in poker -- but not always. Sometimes, another player will have an even stronger hand, and I'll lose despite my strong hand.
Here are the rating of poker hands, in increasing strength...
- High Card
- One Pair
- Two Pair
- 3-of-a-Kind
- Straight
- Flush
- Full House
- 4-of-a-Kind
- Straight Flush
- Royal Flush
And here are some generic types of offers that might exist on a house, in increasing strength, generally speaking...
- Offer with a home sale contingency (anything else matters little)
- Offer below asking price with financing, appraisal and inspection contingencies.
- Full price offer with financing, appraisal and inspection contingencies.
- Offer over list price with financing, appraisal and inspection contingencies.
- Offer over list price with financing and appraisal (but no inspection) contingencies.
- Cash offer, over list price, with no home inspection contingency.
That order isn't actually always 100% accurate - it can depend on the property, the seller, etc. But the point should be clear...
Even if you make a full price offer, with what would be considered to be normal contingencies (financing, appraisal, inspection) you could still lose in negotiations in several different ways.
So -- play your strongest hand, but always know that there could be a stronger hand out there!
