How to Win Highest and Best When Multiple Offers Are Submitted

27 thoughts on “How to Win Highest and Best When Multiple Offers Are Submitted”

  1. “…don’t pay more than your numbers say you should.”
    Hey Mark, that’s the crux of it! Unless you’re an Owner Occupant then you may be able to overpay and let Appreciation catch up with you.

    • Hi Mike,
      I personally don’t ever count on a appreciation as an exit strategy. That is how investors get themselves into trouble. With flips you never know when the market might turn and negative cash flow is never a good thing on rentals.

  2. Highest and best pretty much means you aren’t getting the house. If only people would just sell their house and quit making things complicated for everyone.

    • John, someone is going to get it. Usually highest and best means the house is under priced and people are mad the seller won’t sell it to them for a low price. It is the sellers right to sell the house however they like.

  3. Hi Mark, great article. I have a question for you. I was recently in the middle of negotiating with a bank (as a buyer) when another offer came in, and they asked for highest and best. I had put in an offer on a Friday, the minute the property went on the market. They countered during the weekend, I countered back on the weekend, then on Monday at noon when I still hadn’t heard back, I contacted the listing agent, who said another offer had come in. Pretty soon we were asked for our highest and best, and I ended up losing the deal. Does this happen a lot, in your experience, that banks will ask for highest and best, even when already in negotiions with one buyer? As a seller, I would never do that!

    • Yes, this happens all the time. It is most banks policies that as soon as they receive more than one offer they will go to highest and best unless the home is under contract.

    • That is a good strategy, my thoughts are to jump on it and get it under contract if it is a good deal. It is not worth losing a good deal to try and save a little bit negotiating.

  4. I have a begginer question: Is this technically allowed to submit the seccond buying offer, to be lower then the first one, after getting a Highest and Best notice?

  5. Really enjoyed your article. My question is, if you win the highest and best by submitting an offer that is much higher than the asking price on a fannie mae home path property. And later, during the home inspection you find out that there are major repairs needed, such as roofing or electrical. Can you then negotiate a lower offer with the seller once you are in escrow?

    • You can try, but there is no guarantee. If the items were easily viewable when you made the offer, the seller will not negotiate much if at all.

  6. Hi Mark,

    Thank you for the information. I’ve been reading your blogs almost every day and I find it is very informative. I want to share my story with you. I’m a beginner investor and a new agent just got my license in Feb. I live in Orange County, California. I started looking for a rental property at the end of 2012. The market was crazy at that time. I made offers over and over again but couldn’t land any deals. My husband has a broker license so we are free to check any properties we are interested. We had the highest and best situation once. It was a small condo. We made a cash offer but didn’t raise our price so we ended up loosing the deal. We finally got a deal in Aug 2013. It wasn’t a very good deal though we have positive cash flow. We were so tired of house hunting and making offers. We were willing to take any property as long as we have positive cash flow. Here is the strategy my husband used. He talked to the listing agent and offered 2/3 of his commission to her so the listing agent would be on our side and helped us to get the offer so she could earn more commission. We finally closed the deal after a month. The strategy was worth trying if you are an agent and investor. But I have to say it is really difficult to get your offer accepted in the highest and best situation.

  7. You are part of the problem in Real Estate today! Coming up with crazy gimmicks! Escalation clause???? Really? This is not a form that is endorsed by KCRAR or our Real Estate Commission! Seems you are kind of sleazy in your business practices! I have been selling real estate for over 30+ years and guys like you float in and float out of the market! I have seen it time and time again! Just in long enough to create problems both ethically and legally!

    • Hi Candace, I would be careful about how you word comments and jump to conclusions. If you read the article I do not say you should use an escalation clause, I simply explain how they work and how some agents use them. It is not a form, it is an additional provision. I have been in the business 15 years and my dad has been an agent longer than you. I would not jump to conclusions about people without knowing them.

  8. If there is the listing agent receiving multiple highest best offers on a foreclosure how do i know
    the agent is not letting the other bidders he is working with let them know the bid i’m making
    also on that note would it help if i just ask that my bid be the last one made to the asset manager

  9. Hi Mark,
    I just got bit submitting a highest and best with an escalation clause.
    Offered and was countered with just about my cap.
    I really wish I had read his article first before making that offer.
    What would you recommend I should do at this point?

    • If you want to pay that much for the house than accept it. It is really up to you. Sorry for the late reply I was on vacation.

  10. Im in a highest and best offer situation ..had to sign a document stating no counter offers and there was a deadline of 12 noon …then i find out they accepted an offer after the deadline and the asked me to counter offer that bid .. at an exzagerated price 20000 more then the property was listed for . Is this even leagel

    • The seller can counter how they want since it is their house. I am not sure how they would accept an offer and then counter your offer. they cannot accept two offers at once.

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