The Bank Wants Your "Highest and Best"

We've all been there.

You have finally found that perfect property, and despite it being at the upper end of the acceptable price range, you go for it. You're all in, short contingency period, 20% down, 30 day escrow and a full price offer.

Then you are excited to see the listing agent's phone number come up on your caller ID. "REO broker's don't bother to call everyone back, your offer must be receiving serious consideration" you tell yourself as you mentally prepare to subdue your jubilation of potentially closing on this property.

Then you hear "Hi Jake, we've received your offer on 24 Avocado Ln, we would like you to submit your highest and best offer. This is a multiple counters situation."

Crap.

All of the hard work you go through to find your client this property is now for naught because some idiot is going to overpay for it. Or maybe it is just you, and the multiple offers are bogus? OK, OK, let's raise our offer by 10% just to make sure we get it.

Whoops. That's exactly what the bank WANTED you to do! The "Highest and Best" tactic is a perfect example of why you should decide what the top number you're willing to pay for a property is BEFORE ever making an offer. That way, no matter what tactics are used in the negotiation, you will never go over that number. It's kind of like setting a pre-determined limit when gambling. So, decide what your ceiling is, and either offer that initially, or be willing to go up to but not over it, and you'll never have to worry about the "highest and best" trick again.

-Jake