Highest and Best – you’ve just heard that term from your buyers agent and start to feel the squeezing of pressure even more after you’ve written your offer on a home.
It used to be that we would only hear about “highest and best” when it came to foreclosures. The banks and asset managers for the foreclosures like to use this procedure when there have been multiple offers on a home. In these purchases (foreclosures) it’s a deadline given by the seller (the bank or asset manager) for you to have one more chance to either put in another (higher) offer or to stand pat with the offer you submitted. Buyers agents are given a deadline, usually a 24-48 hour window, in which to either send in a different offer for their client or let the listing agent know that the offer already submitted is the buyers “highest and best”.
In recent months though I have been seeing “highest and best” notifications on normal home sales. (normal – privately owned homes that are not distressed sales). The inventory of homes for sale in Macomb County keeps falling (good news for sellers) and if a home is priced well and in good condition it is common to have multiple offers on the home. In these instances the sellers agent typically will call the agents of the buyers who have submitted offers and given everyone a bid deadline, a “highest and best” notification deadline.
What does this mean for a home buyer? Don’t assume that your offer will be countered and that you can negotiate with the seller with a lot of back and forth on price and terms. Very often your first offer will be the only one that you will be able to submit. If you love the house, if it’s a good fit for you and your family, then submit your “Highest and Best” right from the start. It may be the only chance you will have of obtaining the home.
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