"highest & best" game banks play by Steve Eveleth

The "highest & best" counter offer game the banks play with poor buyers from Steve Eveleth
Since mid to end of 2008 & current 2009 the entry level market is cooking for first time buyers. 90% of low priced bank owned homes are getting 5-10 sometimes even 20 offers in the East Bay, Central Valley & Contra Costa counties. When the banks get multiple offers they counter everyone back at what they call "highest & best" meaning they are not going to tell you how much they want, how much other offers are or even if there are any other offers. They are simply telling you how much do you want to pay for the home what's your "highest & best offer" this is the most difficult situation to deal with because it makes the buyer completely do a back flip in their mind because the first thing you as a buyer think about is "getting the best deal" & price negotiation" well there is none that's just it. The banks purposely throw REO's on the market 3-5 even 10% under comps because for one they have to move them quick to get off the books (banks are not in the business of property management) two, they know they will get multiple offers so they can pick the best one with the highest price that they think has the best chance to close! First question buyers ask is well how much are the other offers? How many other offers are there? How much do we need to put in to get our offer accepted? The difficult part for a buyer's agent is answering don't know, don't know don't know!! AND WE REALLY DON'T KNOW with the highest & best game it's like spinning the wheel of luck. There is no way to tell how many offers there are, how much they are or what bank is willing to take to choose your offer. There are a few things to improve your chances like for instance 20% down conventional loan verse FHA 3.5% down, banks usually would pick the 20% down over the FHA because they think it would have a better chance at closing. Of course cash offers usually always trump the other offers.....now heres a twist (and there’s always a twist with REO's somewhere in each transaction thats different from the rest) is this: I have seen banks choose a FHA offer over cash or 20% down...why is this after what I just mentioned????Bottom line net that’s it....you see some banks don’t care about cash offer they are looking at highest new profit, other banks dont care about net they want it to close quick & don’t want to wait for financing.......this is where it gets challenging for agents & there clients...dealing with the banks is like dealing with the wizard behind the curtain, we simply do not know what the bank is going to do...the old days of inside politics with all parties involved is non-existent with the banks.....we play buy there rules & spin the wheel...just like at Vegas, that’s how you have to look at it when shopping right now....