Question:
“We made an offer on a home. The seller responded saying there are several offers and asking for ‘highest and best’. Can you explain what that is exactly?”
Answer:
The seller is countering those who offered on their home. But instead of countering with a specific price, they’re asking the buyers to come back with their top price.
Then the seller will choose the offer that’s the best package of price and terms.
This practice was unheard of until the foreclosure wave. When foreclosures received multiple offers, banks started responding by requesting “highest/best.”
How it’s become quite common and accepted for homesellers to respond that way.
But that creates an unfair negotiating process. I thought if you offered full price for a property, the seller was required to accept it.
Good point, technically … no. The seller is only obligated to pay a commission to their agent if a bona fide offer comes in based on the terms that they agreed to in the listing contract. We’ve had San Diego home listings with 10 to 30 offers at one time! The seller can’t sell them to everyone. The request for highest and best helps us “cut to the chase” on the best offer(s). And yes, sometimes it backfires and good offers will back out and not want to get caught up in the process.