Highest and Best: Two Words to Loathe and Love
Highest and best. If I was competing in the Olympics for a gold medal in pole vaulting then I’d love to hear those two words together.
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But as a real estate investor when I hear highest and best my blood pressure starts to rise. My face turns red. My jaw tightens. Then I sit down at the computer and start typing words like moronic, stupid, childish, unprofessional, opportunistic, patronizing, condescending and dehumanizing.
Why do I feel this way? Because when I’m asked if the contract I submitted is my highest and best it means the seller of the house I want buy has multiple offers. And that, of course, puts the seller in the enviable position of jacking up the purchase price.
If this happens I graciously bow out of the competition. I don’t want to be pitted against other buyers. I want to be the seller’s only option.
Earlier this week over lunch with my business partner I had a revelation. An epiphany. A light-bulb-above-my-head kind of moment. The term highest and best, in the proper context, can be a good thing for us real estate investors to hear, and be reminded of, from time to time.
Ask yourself this question – are you making the highest and best use of your time each and every day?
Are you getting bogged down working in your business instead of on your business? Are you too busy to find the next money making deal because you’re hanging ceiling fans? Or perhaps you postponed that meeting with a potential investor/partner to check up on the painter? How much is replacing that front door lock yourself really costing you?
When starting out in real estate investing you'll wear many hats â chief financial officer, director of marketing, acquisition specialist, general contractor, quality control supervisor, sales rep. And probably many more.
This is okay. You’ll need to know how to do each of these things well in order to train your replacement. That is, if you plan to do more than a couple deals per month.
At our lunch meeting my partner and I decided that the highest and best use of my time was finding our company more deals. I’d become too focused on the rehab part of our business. He agreed to take over the remodeling supervision and quality control of our fix and flip houses.
This new approach has already paid off for us. I was able to write three offers this week and get one accepted – a bank owned house that just got a big price reduction. The best part is the seller never asked for our highest and best offer.
Apparently my highest and best effort was enough.