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Whats the best way to respond to a notice for Highest and Best offer?

I've put an offer in on a house that my agent says is a very good given the market.  I expected a counter from the Seller but instead received a notice for "highest & best" offer due to the Seller having received two offers. My agent tells me the seller is planning to negotiate which ever offer comes back highest.  Any advise on a strategy of what I should go back with as an offer realizing it won't be the final and I don't want to pay full list price?  
  • March 15 2013 - Atlanta
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Answers (17)

Ask your agent for comps with print outs of the properties used for the comps. Then you can decide how much the house is worth on your own and have something as a benchmark as to what the house is going for in the market. Good luck!
  • July 05 2013
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Offer the highest amount that you think it is worth.  Also put a quick close date that is manageable.  Sellers obviously want to sell it quickly.
  • July 05 2013
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Asking for Highest is clearly the highest price buyer is willing to pay, while Best doesn't always mean the shortest closing date. Sometimes sellers need more time to close.

Best may also mean more Earnest Money and as few contingencies as possible, preferably none. Last but not least, all cash always trumps financing.

In today's market it is not unusual to have multiple offers on the table. When the agent asks for highest and best, seller may be testing the market. I have seen it happen that shortly after the Highest & Best round the deal falls through and the property re-enters the market at a higher price.

  • July 05 2013
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Looks like everyone has pretty much the same idea.  Offer your highest and best that you are comfortable with and don't extend beyond what you can afford, monetarily and emotionally.  

If you win the bid, congrats!  But don't let the question of "how much less were the other offers than mine" haunt you -you'll never know.  
  • March 15 2013
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We recommend having as frank a conversation as you can with other realtors involved and be prepared to pay asking price, given the conditions of the market today.
  • March 15 2013
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Profile picture for OlgaRubin
Consult a realtor on this point. Negotiating should not fall on your shoulders and your realtor should have an idea of what would be appropriate in this instance.
  • March 15 2013
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The real estate market has turned the corner now as we are seeing multiple offers. That said bid what you can afford, the home still must appraise for the sales price. If it does not, your real estate contract offer shoudl have wording that allows for renegociation or walk away if the price comes in low. 

  • March 15 2013
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Highest and best doesn't always mean that you will be able to negotiate further and it may have to do with terms as much as price.  I would listen to your agent and make the highest and best offer you feel comfortable with.  You have to feel comfortable that if you lose the house, you did the best you could and have no regrets.
  • March 15 2013
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A request for Highest and Best is not necesarily that the other offer is higher than yours, just that they are trying to find the top.

Work with your Realtor and make sure what you are offering is at market value based on his/her research. Prices are skyrocketing in this area, according to my firm's statistics, and you don't want to offer below market on a house, then end up paying more later for a few dollars today. If you like the house, if it is "the ONE", make the best offer you can afford and the market will bear.

If your agent has included an appraisal contingency in your offer, that will protect you from overpaying for the property.

Best of luck!
  • March 15 2013
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Profile picture for JoshBarnettREIB
Offer the best offer you are willing to pay for the property.  If the offer you have already provided is the most, just resubmit your original offer.  

Verify everything with your Realtor also.
  • March 15 2013
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Lots of good advice given...do not offer more than you're comfortable offering. Do not try to win a blind bidding game based on emotion. Best Wishes!
  • March 15 2013
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Profile picture for BradNiemann
Take some time to figure out what the most you would be willing to pay for this property.  Make an offer for that amount.  If you are not the highest bidder then you have not lost anything.  If the property sells for more than what you were willing to pay move on to the next one and go on down the road.
  • March 15 2013
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DO NOT assume there will be more chances to make another offer. The other offer could knock you out and you are done. These often go for full price or very very close, so look at it like your last chance to dance. If you like the house and lose it you will regret it for years.

tim
  • March 15 2013
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Profile picture for Neeraj Jassal
When my clients are competing against other offers and are told to give their highest and best offer, I tell them to come up with the best number that they are comfortable spending.  We tweak other things, too, such as increase of money held in escrow, truncating closing dates, removing contingencies they can live without, tightening up mortgage contingencies.

If you really want the house, put your best foot forward.  You have to evaluate how badly you want it but at the same time set realistic limitations on affordability.
  • March 15 2013
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Respond with your "highest & best" offer, whatever that is.

If you have already offered your highest price, reply back with the same. If you can alter other factors like closing date, financing, warranty, etc., then make those changes.

Either way reply.
  • March 15 2013
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Seems to me that there are only two choices. You could back out of the whole thing and let the other buyer get it for less, or you could give them your "highest & best" offer.

All the best,
  • March 15 2013
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what does your agent advise?

This is common here and you may be up against investors. The answer is have your agent prepare a DETAILED review of the CLOSED comps that an appraiser would review, then one for pendings and actives - find out the trends for that area for a home like this one.

Keep the offer very clean - cash is best - remove any nonsense stipulations, shorten all time frames, include a preapproval letter and at least 1% earnest money and close ASAP.

Do not over pay - but you will likely see list or over depending on area. Your agent needs to thoroughly brief you on the data.
  • March 15 2013
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