One of the most-read blog posts I have written on here is about how to lose at highest and best offers.  I want to take a few minutes here and sort of do a follow up, because I’ve been handling a few multiple offer situations in the past week – I had three properties get a whole slew of offers, so all week long I’ve been working with a number of agents, taking phone calls, e-mail inquiries, offers, and highest-and-best offers.


Here’s the thing:  I keep all offers confidential.  That is to say, if you put an offer in on one of my properties, I will not tell anyone else anything about that offer – not the price, terms, nothing.  I do this because in most cases I am instructed by my clients to keep the offers confidential, in other cases this is only implied, and when it is not implied, I keep all offers confidential because I think it makes the most sense to do so.

So here I have all these offers on these properties last week, and agents call me up, and they ask:  hey, is it too late to put in an offer?  I tell them no, not at all – we are doing highest and best offers right now, so please put in your highest and best offer.  They ask what price they need to come in at – and I tell them my standard line:  all offer prices and terms are confidential, however, given that we already have, say, 6 offers, they should be prepared to be competitive.

If you are a buyer and you want to put in an offer on a property that already has six offers, the question to ask yourself is:  is this offer going to beat out 6 other offers?  Will my offer be the best of seven?  Given that they are already doing “highest and best” offers – you won’t get another shot, you have one chance to offer on the property.

What surprises me is how many buyers, given this situation, will come in under asking price.  It’s amazing.  I am going to say something which if you are a buyer, I want you to take a deep breath, and stare at the next sentence for a minute:

I have never seen an offer below full asking price win in a multiple-offer situation.

Never.  Not even if you are competing against just one other offer.

Now, some buyer out there can doubtless claim that they have done just that.  And I am sure there are agents out there who will tell you that this can happen from time to time.

I have never seen it, though, and I have to say:  it is a losing strategy. If you are going to play the multiple offer game, why play to lose?

What also is amazing is that when I tell agents that their buyer’s offer needs to be competitive to beat out, say, six other buyers – they come in only at full price.  I really hate to try and make rules or formulas for figuring out how much to offer.  But if we are talking about a winning strategy, here goes one:  if you want to win in a multiple offer situation, come in something over asking price.  This is not a rule, but I’m going to put this out there:  if you are competing against 3 or more offers, you need to come in over asking price to be competitive.

Now, I shouldn’t really be telling anyone any of this.  Why?  Because if people took my advice to heart, they would realize the futility of writing up weak offers in a multiple offer situation.  The number of offers that I get on my listings feeds the hysteria and drives the price higher, which is good for my clients  – and good for me, since I’m paid on commission –  except of course when the bidding goes up high over my BPO value, but that’s another story.