Multiple Offers on My Long Island House: Should I Take the Highest One? Why My Homeowner Took $1.325M Over $1.35M
Long Island Seller Offer Strategy
I once had a homeowner turn down an offer that was $25,000 higher. On another house, we passed on an offer $20,000 higher. Both homeowners closed, on time, with no drama. Neither one left money on the table. Here’s why the highest number on the page is often not the best offer you have.
Mo’s Quick Answer
Not always. The best offer is the one most likely to close, on time, at the price you agreed to. A slightly lower offer with a big down payment, no financing contingency, completed underwriting and a flexible closing can be worth more than a higher offer that depends on a small down payment, a strict appraisal and a long list of conditions.
Compare what each offer is likely to put in your pocket at closing, and how likely it is to get there. Price is only one line of that math.
Why the Highest Offer Isn’t Automatically the Best One
An offer is a promise to buy, with conditions attached. On Long Island, that promise doesn’t become binding until both attorneys finish the contract and everyone signs. Even then, the contract usually gives the buyer ways out: a mortgage contingency, an inspection, sometimes an appraisal condition.
So when you hold several offers, you’re not really comparing prices. You’re comparing risk. Every condition is a door the deal can walk out of, or a moment when the buyer can come back and ask for money.
When a deal falls apart after you’ve accepted it, you don’t just go back to the second-best offer. Those buyers may have bought something else. Your home now shows as “back on market,” and the next buyer will ask why. You’ve also lost weeks, sometimes months, of carrying costs.
From My Experience: Two Times the Highest Offer Lost
Real deal, details anonymized
Listed at $1.25M. Highest offer $1.35M. We took $1.325M.
My analysis put this home’s fair market value around $1.3 million. It was in move-in condition. I listed it slightly below that, at $1.25 million, on purpose. Pricing just under value pulls more serious buyers in at once, and competition does the rest.
It worked. Offers came in from about $50,000 below asking to $100,000 over. The highest was $1.35 million.
We accepted $1.325 million. That buyer was financing, but with 60% down. They waived the financing contingency because their underwriting was already done. The inspection was for information only, not a renegotiation tool. And their timeline was flexible: they could close fast or wait if the homeowner needed time.
We closed in 35 days. No re-trade, no appraisal scare, no waiting on a lender to say yes. When you put everything side by side, that $25,000 wasn’t money left on the table. It was the price of certainty, and it was cheap.
Real deal, details anonymized
Floral Park. Listed at $699K. 23 offers. We took $800K cash.
This house was in fair condition and needed work. It also had a half-dormer extension with a full bathroom, both done without permits. We held one open house. It was packed, and by the end of that weekend we had 23 offers.
The top number was $820,000, FHA financing with 5% down. FHA loans are a good program and help a lot of first-time buyers. But on this house, that offer stacked the risks: a thin down payment, and an FHA appraisal that has to support the full price and check the home against HUD’s property standards, on a house in fair condition with unpermitted work. Plus a lender that still had to approve the loan.
The second-highest was $800,000, all cash. No lender, no appraisal, no mortgage contingency. The homeowner took it. Giving up $20,000 on paper removed almost every way the deal could fail.
In both cases, the homeowner made the decision. My job was to put every offer side by side so they could see the real difference, not just the headline number.
What Makes an Offer “Clean”?
These are the terms I weigh, roughly in order of how often they decide a deal on Long Island:
| Term | Stronger for the homeowner | Riskier for the homeowner |
|---|---|---|
| Financing | All cash, or a large down payment | Small down payment, loan barely fits the buyer’s income |
| Mortgage contingency | Waived, or short, with underwriting already completed | Long contingency period, only a pre-approval letter |
| Appraisal | No appraisal (cash), or enough down payment to absorb a low value | Appraisal must hit the full price with no gap coverage |
| Inspection | Informational only, or limited to major items | Open-ended, a likely source of credit requests |
| Timeline | Matches your move, or flexible either way | Fixed date that doesn’t fit your next home |
| Contract deposit | Ready to sign and fund quickly | Delays getting to a signed contract |
| Proof | Proof of funds, lender commitment, responsive agent and attorney | Vague documents, slow answers |
Why a 60% Down Payment Changes the Math
A lender generally lends against the lower of the purchase price or the appraised value. When a buyer puts 5% down and the appraisal comes in low, there’s no cushion. Someone has to cover the gap, or the price has to come down, or the deal dies.
When a buyer puts 60% down, the loan is a much smaller share of the price. A modest appraisal shortfall usually has room to be absorbed. That’s one big reason a financed offer with a large down payment and completed underwriting can compete with cash.
Hypothetical example, not a client story: On an $820,000 price with 5% down, the buyer brings $41,000 and borrows the rest. If the appraisal came in at $790,000, there’s a $30,000 gap. A buyer who stretched to make the 5% often can’t cover that in cash, so the request comes back to you as a price reduction.
The higher offer can end up lower, weeks later, with fewer buyers left to fall back on.
FHA Offers: What Homeowners Should Understand
FHA financing isn’t a reason to reject an offer. I’ve helped plenty of FHA buyers win. But you should know what comes with it:
- FHA allows down payments as low as 3.5%, so there’s often little room to cover an appraisal gap.
- The FHA appraiser checks the home against HUD’s minimum property standards for safety, soundness and security, and can call for repairs before closing.
- An FHA appraisal is tied to the property’s FHA case number and stays valid for 180 days. If the deal falls through, that report can follow your house to the next FHA buyer, along with any required repairs. Confirm the details with the lender.
A strong FHA buyer with gap coverage and a solid lender can still be the right choice. The point is to know the risk before you sign, not after.
Common Mistakes Homeowners Make With Multiple Offers
- Picking the top number without reading the terms behind it.
- Treating a pre-approval letter like a mortgage commitment. Only a written commitment that meets the contract terms satisfies a mortgage contingency.
- Ignoring the timeline. A great price on the wrong date can force a second move or a bridge loan.
- Telling buyers about offers that don’t exist. It breaks trust and can backfire badly.
- Going silent on the runner-up. Thank them, keep them warm, and let your attorney advise on backup arrangements.
Myth vs. Fact
My Offer Review Framework
When the offers come in, here’s how I walk homeowners through them:
- Collect complete offers only. Price, down payment, financing type, contingencies, inspection terms, closing date and proof of funds or lender documentation.
- Verify, don’t assume. I call the buyer’s lender and ask what’s actually been completed, not just what the letter says.
- Line them up side by side. Price, estimated net, and every condition that could change either one.
- Ask for highest and best when it makes sense, with a clear deadline and the same rules for everyone.
- Choose the offer most likely to close at its price, on a timeline that works for the homeowner’s next move.
- Get to a signed contract fast. Your attorney handles the contract. I keep everyone moving.
Frequently Asked Questions
Should I always accept the highest offer on my house?
No. Compare how likely each offer is to close at its price. Financing strength, contingencies, appraisal risk and timing can make a lower offer the better choice.
Is a cash offer better than a higher financed offer?
Often, but not always. Cash removes the lender and the appraisal. A financed offer with a large down payment, completed underwriting and a waived financing contingency can be nearly as safe.
What does waiving the financing contingency mean?
The buyer agrees to close even if their mortgage falls through, so they put their contract deposit at risk. Your attorney should confirm exactly what the contract says.
Why are FHA offers considered riskier for homeowners?
FHA allows low down payments and requires an appraisal that meets HUD property standards. A low value or required repairs can lead to renegotiation or a delayed closing.
What does “highest and best” mean?
It’s a request for every buyer to submit their strongest price and terms by a deadline. It works best when the rules are clear and the same for everyone.
Is an accepted offer binding in New York?
Generally no. The deal becomes binding when the attorneys finalize the contract and both sides sign it. Ask your attorney about your specific situation.
How long does a clean offer take to close on Long Island?
It depends on the attorneys, title and the buyer’s funding. In my $1.325M example, a clean financed offer closed in 35 days.
Should I tell other buyers what the highest offer is?
That’s a strategy call to make with your agent, and it must always be truthful. Never imply offers or numbers that don’t exist.
Mo’s Bottom Line
Multiple offers feel like the finish line. They’re not. They’re the moment the real decision starts. The goal isn’t to win the highest number. It’s to walk away from the closing table with the best result and no regrets.
Thinking About Selling and Want Offers Worth Choosing Between?
If you’re serious about selling, start with an honest number. I’ll show you where your home really sits and how I’d position it. And if waiting is the better move for you, I’ll tell you that too.
What Is My Home Worth? Homeowner Consultation FormPrefer to talk first? Book a homeowner consultation on Zoom.
Official references: HUD Mortgagee Letter 2022-11, Revised Appraisal Validity Periods; HUD Single Family Housing Policy Handbook 4000.1; HUD, Let FHA Loans Help You.
This article is general information, not legal, tax or financial advice. Every contract and offer is different. Consult your real estate attorney about contract terms and contingencies, and the buyer’s lender about financing and appraisal requirements. Past results don’t guarantee future outcomes.
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