"Mr/Mrs Buyer, there are multiple offers on this property and the Seller has asked for our highest and best offer."
More often than not, my Buyers in this situation automatically think that the Seller is trying to pull something over on them. "Jay, do they REALLY have other offers or are they just trying to jack our price up?"
Well, let's think about it for a moment. A few things can happen here:
1) A greedy Seller gets two GOOD offers, rejects them both for "highest and best" and they BOTH walk away. uh oh, not good.
2) A Buyer is forced to cut through the game and get right to his/her best price. Game over. (This is a good thing!)
3) During the Highest and Best period, NEW BUYERS could come into the game and toss their hats in the ring. Now my Buyer's chance of winning the property just went down.
Is the Highest and Best a good choice for a seller?
Good question! (I'd love to hear your comments on this below because everyone has their game plan.) My coaching to my SELLER is to look back at the GOALS we established at the beginning of this process. Will any of these offers get me there without going to highest and best? If so, pick that one and take a bird-in-hand. If they are all low-ball and our goals are not met, yes let's go with highest and best.
Is Highest and Best good for a Buyer?
The easy answer is "NO, of course not!! Now we are bidding against more people!" But let's think about this... My Buyer has a goal, just like a Seller does. Yes, we want to get a "deal" for our Buyers but there is something to be said for keeping our eyes on the ball and putting our best foot forward. Here is my best coaching moment for my Buyer in a highest and best situation:
"Mr/Mrs Buyer, here is what we are going to do: Let's forget about the other 8 people bidding on this property. We don't know anything about them or their motives so we cannot accurately make any assumptions about what they are going to do. The only thing we can control is OUR MOVE. We will go in with our VERY BEST number right now. The way we know this is our best number is if we LOSE this deal, you will be 100% OK with it, knowing that you did the very best you could and left every penny on that table. Can you do that for me, Mr/Mrs Buyer? What number will give you that comfort when we get the results of this back tomorrow?"
So, is this a cruel game that banks/agents/sellers play with us?
No.
An agent has a reputation to uphold and cannot be known as the agent crying wolf about highest and best every time. Plus, we have seen above that there is some risk in going this road for a Seller if there aren't good reasons for it.
Put your best foot forward and go get some properties with your HIGHEST AND BEST!
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