What Does Buyer Come Back With "Highest And Best" Mean?
Here in the Portland Metro area our home inventory in general is pretty low at 3.9 months. There are some neighborhoods that are very hot and the inventory is less than two months. As a buyer purchasing in this market it will be fairly common to be in a multiple offer situation, especially in these neighborhoods. I'm actually seeing quite a lot lately things like "listing agent will be presenting all offers on " so it doesn't matter if your offer is in earlier than the others.
Depending on how many offers there are, most listing agents (at the request of the sellers) will often send an addendum out notifying the buyers of the multiple offers and asking that they come back with their "highest and best" offer. This is just as it states, so it's not the time to hold back thinking that the seller will still be countering. This is their counter.
I often get the question "Without knowing what the other offers are, how do I know what my highest and best should be?". Of course at this point I've already run the comparables so you know if the asking sales price is good for the neighborhood or high. I've also spoken to the listing agent to see if I can get any info out of them as well as asking what terms would be more suitable to the seller that may set your highest and best offer over the others.
My response is usually "Offer what you would feel comfortable with knowing that the seller might not take your offer". This can also be something other than price as the other aspects of an offer terms can be just as important. You might want to raise your earnest money amount, or change the close date or offer a seller rent back. If you know it's doable, you can also reduce the days of your home inspection and of course there is always the sales price. Of course there is the option of just sticking to your original offer as well. At this point, the seller will review all of the highest and best offers and except one..or perhaps counter that one with some fine tuning details, or except none.
Give me a call if you're thinking about buying or selling in our crazy Portland market. I'd be happy to guide you through this process!