The “Highest-and-Best, I-Really-Mean-it-This-Time” Offer
I’ve previously blogged about the practice of “highest and best” offers (“Highest and Best, Explained.“) Typically used by banks selling foreclosures, “highest and best” is a way to efficiently sort out multiple offers and identify a winning bidder.
Implicit in “highest and best” is a quid pro quo between the bank and would-be Buyers: Buyers “cut to the chase” and put their highest offer — with the best terms (closing date, contingencies, etc.) — on the table.
In exchange, the bank agrees to select the best offer — one more round, no counters.
Except in practice, that’s not what the banks have been doing (at least in many cases).
“Highest & Best” Redux
I’ve been in at least five deals the last few months where my client was told, after submitting an offer, to re-submit their “highest and best” offer — which they did.
After a few days elapsed, guess what the listing agent (representing the bank) called to tell me?
There was still no clear winner, so my client was invited to — you guessed it — “submit their ‘highest and best’ offer” once again. (I suppose this would be their “really-highest-and-best-I’m-not-kidding” offer.)
Since my client already submitted their (genuinely) highest and best offer the first time . . . they dropped out.
Feeling manipulated, no doubt other bidders did as well.
No wonder you see so many foreclosure deals fall apart, start over, and otherwise stagger across the finish line.