Anyone else think that any listing agent who says they need all bidders “highest and best” and then after receiving the bids they counter substantially all those bids to drive “higher-er and best-er” should be imprisoned.
Seriously, shouldn’t a seller (or the Agent rep) who requests the highest and best (due to multiple bidders) have some conviction to actually accept the offers as being the highest and best (or walk away)?
When I bid in situations like that I make the offer subject to a short timeframe upon which I deem it reasonable to evaluate the offers after which my offer expires. (Clearly, not making friends that way)
@Tom C. it has definitely been a long time since sellers were in the drivers seat, but now that they are the highest and best is becoming very common again. In my market here in the Berwyn/Forest Park area, I have had just about every deal be a highest and best situation this year. This makes it frustrating for the buyers for sure, and I wish I had more information to help them. We are in a rapidly appreciating market in Chicago, and sold comps from even six months ago are no longer that helpful in pricing out a property!
Sometimes countering a H&B makes sense. If the highest offer is a low down payment offer with a shaky lender it make sense to ask a stronger buyer to match the higher offer.
Agents have a responsibility to the seller. If integrity is in question it should be a two way street.
When buyers put in highest and best offers and agent comes back looking for more if we assume buyers have integrity there would be no counter offers. Assuming buyers had integrity when they made their offers of highest and best. This is rarely the case. Everyone should know and understand the business. This boils down to a bidding game regardless of where the bidding begins. Get in or get out.
We all understand Highest and Best is a start point to eliminate tire kickers.
In my market 75% of deals for the last 2 years has been highest and best. I have had agents counter back on terms, or set the terms before the deadline to submit, but I have never had an agent come back and counter on price
Highest and Best along with escalation clauses have been tactics used by sellers around here (Grand Rapids, Mi) for a few years. Its it frustrating to have a listing agent come back to your offer and counter on price but there is a few reasons why. The listing agent only owes the seller any fiduciary responsibility. They do not owe anybody else involved in the transaction anything. The LA is trying to get more money for the seller and they are allowed to do so if you are in that situation, pay attention. That listing agent is reaching out to you because all of the rest of your terms are favorable to the seller so there is your chance. If you really want the property, change your offer.
@Tom C. i can feel your frustration with that post for sure! I have definitely been in a situation where a seller was looking for a specific amount and the multiple offers, even after H&B was called, didn't suffice. Of course a seller doesn't HAVE to accept one and they have every right to say "Well, this is my "lowest and best" in return. At that point, either the buyers walk or a contract can occur.
Pretty sure all of us whom are real estate brokers have encountered a time when H&B didn't mean H&B. ALWAYS chat up and be friendly with the listing broker since they are the gatekeeper to the seller and will absolutely advise on which offer they deem the strongest. This can't be an emotional transaction for us, the brokers, so we need a cool head. Telling a listing broker they should be imprisoned probably wont play well if your clients offer is a coin-flip with another offer on the table, so play it cool, be friendly and get it done for your client. Just saying. :)
Im thinking real estate might not be the business for you. Imprison people for acting in the best interests of their clients? That is completely absurd. You do realize that agent represents someone else and not you right? Your profile indicates you are an agent so you should know how it all works.
I am not suggesting that anyone act in a non-fiduciary way. I am merely saying that "highest and best" indicates the nature of the sales process, so the Agent needs to educate a seller that asking for the highest and best offers typically should mean that the seller intends to follow that processes.
I just think rather than educating the sellers, the agent allows themselves to look like schmucks to the buyers.
@Tom C. highest and best is a negotiating tactic, no different than a buyer asking a seller what is the lowest price they will accept. Most buyers after learning the lowest price, will offer underneath it - right?
As a buyer, usually I won't play games after being asked for highest and best. I give my best and if they come back, I tell them I gave my best as they requested. I do that because I know if they are talking to me that I was the best offer. That being said, if the counter was something trivial, why would I lose a deal over it?
Agents have to be careful not to appear shifty or they stand to harm their own reputation, so there is a "self regulating" aspect.
Also keep in mind highest and best is subjective.
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