When the Silver Spring, MD Real Estate market is a competitive one, when there are more buyers than listings and multiple offers are not an anomaly, then the listing agent - on behalf of the sellers - will often call for highest and best offers.
It's a strategy that is used in multiple offer situations but is it a good one? It depends on who you are of course, the seller or the buyer.
If you are the seller then this strategy can eliminate rounds of negotiations and up the offers that you have received. Ideally, you will end up with the highest price and hopefully most favorable contract terms for you. But keep in mind that price is not the only term you should pay attention to. When is the closing date and does it work for you? How many contingencies are there? How much of a seller subsidy are the buyers asking? What is the status of the buyers financing and who is the lender?
Could you still negotiate with the buyer who submitted the highest and best offer? It depends. The buyer does not expect you to and he already put his best foot forward. But if the closing date needs to be changed to fit your needs or time lines need adjusting, then these are things that can still be worked out. If you ask above and beyond what the buyer is willing to do, however, you could risk losing your highest and best offer.
If you are the buyer then the call for highest and best can feel like throwing stuff blindly at a wall in the hopes it will stick. It's best to remain calm, review the comps (again) and decide on what this house is worth it to you. Make an offer that will leave you with no regrets if yours turns out not to be the highest and best.
Could you be offering much more than the 2nd highest and best offer? Possibly. One way around that is to include an escalation clause. You offer a price and agree to escalate up to a certain amount in steps. If you offer 300K for example but are willing to go as high as 310K, then you say you'll up any other offer by $500 or $1,000 until your max is reached. Again .. you decide what that max is. The comps should still support the price unless you are willing to pay cash over the appraisal value. You can also tweak your other offering terms a bit. Perhaps your agent can find out which closing date would be ideal for the seller. You can make sure your loan preapproval is as strong as it could possibly be and you could also increase your earnest money deposit.
The call for highest and best - is not unusual when the Silver Spring, MD Real Estate market is a competitive one.
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