In my opinion there is no right or wrong answer, but I can give you what I think are some common sense guidelines.
1. Where is the original list price? When you sell your home in Palo Alto your Palo Alto Real Estate Agent will give you an opinion as to where your home will sell. It will generally be a range between what he/she thinks the bottom and top are. It is just a guess, although most Palo Alto Real Estate agents will be able to give you an educated guess. If you decide to list the home at the top of that range, your decision to counter or multiple counter an offer may be different than if you list at the bottom of that range. You will have a better chance of getting a higher price with a counter or multiple counter if you have listed at the lower end of the range than at the higher.
2. Are there several offers that are all clumped together in price and/or terms? If you are selling a home in Palo Alto and the list price is $1,600,000 and the highest offer is $1,675,000, but there are a number of other offers between $1,665,000 and $1,674,000, with similar contingencies, or lack of contingencies, then as a Palo Alto Real Estate Agent I would advise you to counter all the offers in that price range.
3. If the home you are selling in Palo Alto is listed at $1,600,000 and you have one offer at $1,7000,000 with terms that are acceptable, and all the other offers are $1,675,000 and below, I would advise taking the highest offer and working with that one. My rationale is "Dont get greedy." If only one person thought the home was worth $1,700,000 and you counter that person, he/she may walk away, leaving you with offers that my never even get to $1,700,000.
4. If the home you are selling in Palo Alto has a current market value of $1,600,000 at the top of the price range, and that is where you list it, I would advise that you take the best offer of $1,6000,000 or higher and be happy you got it. If the best offer is $1,610,000 and the other offers are in the $1,550,000 range, do not expect that the others will come up, just because one buyer did.
There is a real art to knowing when to counter, when to multiple counter, and when to accept. Hopefully you will have picked a Palo Alto real estate agent who is savy enough about these negotiations to help guide you through the process of selling your home in Palo and getting you the best price and terms for the home you are selling in Palo Alto.