Seller trying to use tactics on me? What do you think?

[Peter K.]

So I placed an offer on a SFR, the listing agent told me through my agent that "The seller has received a second offer on this home and is requesting a 'highest and best' offer from the buyers by 5:00pm tomorrow" . Honestly, I think this is a b.s. tactic where they are trying to engage me into a bidding war (without for sure knowing if there is even "another buyer"(?)"). I'm not emotionally attached and am willing to walk away from this deal at any moment. But I wanted the BP community to share your insights? I know I heard on one of the podcasts (where at an auction- they have a reserve price- and they have their people place bids to get it up to that price so they can encourage other people to bid higher), so I think this applies to the exact same situation. What do you think?

[Charlie MacPherson]

@Peter K. It could be BS, but it would be unethical.  When I represent a seller, I have a fiduciary relationship with him.  I'm required by ethics and law to get him the best deal possible - but I cannot lie to do it.

That said, I'm in the process of selling a property in the Boston area for another BP'er.  It's in a super hot market.

It's actual value is $400K, so we listed it at $375K in order to generate a bidding war.  We held off showings until the one and only open house on Sunday and requested final and best by 6:00 PM on Monday.

The open house was wild, with over 50 people coming through.  We had 7 offers.

The high bidder contacted me to ask how they could improve their offer.  

We ended up at $434.6K and the buyer (at my suggestion) dropped the home inspection contingency. :-)

So yes, especially in a hot market, final & best is a legit tactic - but there is another option.

Submit your highest & best, even if it's the same number, but include an escalation clause:

"Buyer will increase his offer to exceed any bonafide, good faith offer by $1,000 to a maximum price of $XXX,XXX.  The competitive offer must be presented for verification."

That should smoke out any BS.  If the agent or seller were to create a fake offer, they would have crossed the line into actual fraud.