“Highest & Best,” Defined

[Note to Readers: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.]

One of the more anguished — and fruitless — laments uttered by Buyers who just found out they lost in multiple offers is:  “But, I would’ve gone higher!”

Then, they should have.

The way “highest & best” works is . . . pretty much how you’d think.

One round, highest and best vs., say, an auction, where the bidding keeps rising until only one Buyer is left standing (or solvent).

Different Than an Auction

While a Seller adhering to “highest & best” rules may ultimately negotiate improvements to the most attractive of the proffered offers — common tweaks including asking the Buyer to beef up their earnest money, or change the closing date — they’ll pick just one offer to work with . . . and reject the rest.

No round #2, no chance to up your bid.

Which means Buyers truly need to come in with their best number, first.

Which in turn is why Sellers (at least in Minnesota) very much like this format . . .

See also, “Prospective Home Buyer: “The House I Want is in Multiples; What Should I Offer?’”; “Once Bitten, Twice Shy? Not in the Housing Market“; and “The Consequences of “Highest & Best’ in Multiple Offers, or, Would Coulda Shoulda.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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