I occasionally see Highest and Best listings in my area, it seems as though they're usually on properties that are expected to generate multiple offers in a short period of time. Looking through the listing, I can usually see why (I know my area pretty well and can spot a "hot" one).
H&B doesn't mean the property can't be toured, and they're typically listed for somwhere between a few days to a week, depending. It's not like they're listed today and all offers are due tomorrow.
I disagree that bidders are kept "in the dark". There's always a listing price attached, so how is it any different than putting in an offer same as I would otherwise? H&B makes it clear that low-ball offers nor offers with unreasonable contigencies aren't likely to be in the running -- that saves everybody time and effort, including the bidders. No tire-kickers here.
I would argue that it may actually be more fair and better for both parties to do H&B. I say that because sometimes offers come in after an initial offer is presented and accepted that are actually better offers than what was already accepted, but the house is already under contract. Yes, the better offer could put in a back-up offer in case the other deal falls apart but nothing may come of it; I did that on a house I lost out by one day but never got the house. H&B allows all offers within the specified time frame to be presented to and considered by the seller at the same time; seller chooses best offer, and buyers are competing against each other in real-time, they're not going to lose out on a house by mere hours or a day.
It also may create a leveler playing field for buyers who are not connected with a good agent who will call up the listing agent and say hey I'm presenting an offer later today, what are the odds of it getting accepted, what can we do to make it a more attractive offer, etc etc. Yes that's good old-fashioned networking and off-the-record negotion, we all know it happens (or should happen with a good agent). It works in somebody's favor, but not in the favor of those who lost out on a bid because they didn't have that insider info or a proactive/aggressive agent; in this regard, some buyers may be "in the dark" in the traditional bidding process. Best bid isn't always the highest bid.

ETA: I've not seen a H&B that can't be toured. I have seen listings that cannot be toured such as a tear-down or similar dangerous situation, but even then prospective buyers may be allowed to tour the property, just not enter the home. I'm not familiar with how auctions works, but H&B is not the same thing.

I also disagree that H&B are at the lower end of comps, as you stated. Not in my area they're not -- as I stated, these are homes that are expected to generate a lot of good offers, nobody's fooling around here.

I've seen it done a bit differently. There is usually a date for offers to be submitted. Sellers and listing agent review the offers, they then go back and request best offers, there might be another round of best offers with the top/most motivated buyers.

The buyers never have to accept any of these offers.

The danger for the seller is buyers tapping out of the process. We have done that before and pulled our offer after a second round. The listing agent has to be able to keep the buyers in the process and not piss them off!

My experience is in desirable towns in Boston and LA, so definitely not at the lower end. I have seen final sales prices that were hundreds of thousands above the original listing price, so the bidding strategy can definitely work well for sellers.

I wonder if this is a State by State differance. We've sold two homes dating back to 1992. All bids came in one at a time. All were evaluated alone and either accepted or denied. There was no 'auction' atmosphere. You had no way of knowing if the next envelope held a higher offer. There was no bidding wars or comparing one offer to another. How could it not result in less money for the seller? Today no one should trust or assume a realtor is negotiating in your best interest. All to often they are handling both sides of the fence, they are most interested in quick sales as that is when they get their money. Their take on the total does not significantly change when one offers a few thousand less or more.

Clarification - low end of the comps means the lower end of the comparable houses - not that the houses are in the low end of the market. Rather than the old school practice - price 10% above what you expect to get, these homes are priced 5% lower than what other similar homes sold for and the expectation is there will be a lot of interest and everyone knows a full price offer isn't going to make the cut.

In the negotiations that I have been in the loop the resulting price has been at the high end of the comparative sales. I haven't seen where it went way over what you would expect or any offers that were under what the sellers expected to get. Obviously, if all the offers were unacceptable the seller could decline all offers, but countering any of the offers doesn't seem to be part of the process.

California is the only state I know of where they have a multiple counter process, where the seller can counter two or more offers at the same time. In most states, the counter offer is binding, so if you countered two offers simultaneously and both were accepted you would have sold the same home to two buyers.

New Jersey is the one state that I know of that an accepted offer isn't necessarily the final word. They have a 3 day attorney review period, so if the seller accepts an offer on Monday and they get a better offer on Wednesday they can have the attorney cancel the contract and start over with the newer, higher offer. Nothing is final till the end of the three day attorney review period, which starts over every time there is a change.

2nd Clarification - Buyers are not blind, they can tour the home - the sellers are blind to the bids coming in. I call it an auction because it is much more like an auction than the traditional process of offers and counter offers - not an actual auction of the property.

Two of the homes in my neighborhood were sold through an auction house rather than by a realtor. Lower fees, an agreed upon lowest acceptabe price, no contingencies, highest bid wins.

Usually open for visual inspection a few hours before the auction begins. Both of the houses that went through the auction process were estate sales - parents died, kids just wanted to get rid of the house without any hassle.

"I call it an auction because it is much more like an auction than the traditional process of offers and counter offers - not an actual auction of the property."

H&B is not an auction, and they are not interchangeable terms; they are two different things. Highest monetary amount offered is not necessarily the best offer -- note the "best" aspect of H&B. And yes, laws can and do vary by state.

"Rather than the old school practice - price 10% above what you expect to get, these homes are priced 5% lower than what other similar homes sold for and the expectation is there will be a lot of interest and everyone knows a full price offer isn't going to make the cut."

Just as laws can and do vary by state, so do local customs/practices within the confines of the law. As I said, in my area it's only the properties that are expected to garner multiple good offers that go to H&B, and as such I stand by my commentary and reasoning that H&B may actually be more fair and better for both the buyer and the seller. Nobody is farting around or playing games on a property that goes H&B in my area -- that offer better be your highest, it better your best, and more than likely the offers are ABOVE listing price with few, if any, contingencies.

Next year, next market downturn, next recession, next whatever and it may be a different ballgame -- my comments are based on what is happening at this point in time in my local market.

ETA: "Buyers are not blind, they can tour the home - the sellers are blind to the bids coming in."

The sellers are not blind to the H&B bids coming in -- they all come in at the same time. How is this any different than a house getting multiple offers in the same day and the selling agent presents all offers at one time to the seller later in the evening for a thorough evaluation of each offer? I don't see how it is other than it's a cut-and-dry deadline, get your act together and bid if you're going to bid situation. I can't speak to other states (as in Arcy's comment above), but here if I get 3 offers in the same day I can evaluate them all at the same time and choose what I consider to be the best offer.

When I sold real estate and got multiple offers on a property we would be talking to the other realtors, guiding without giving all the details, letting them know what might work, what would keep their offer from being selected - it was the art of negotiation. Those two or three offers would be amended and resubmitted or not. There was risk that someone would back out and not come back with another offer, but the other realtor knew what was likely to happen.

This is much more cut and dry. Not sure it is a bad thing - not sure it is a good thing. Just very different. No guidance to the buyers on what motivates the seller --- clean offer over higher price or higher price over clean offer. . . Just give us your best and final.

When I bought each of my homes I knew what was motivating the sale and knew enough about the sellers to know how to write the offer that would get me the house. I don't know if I could have done as well without knowing anything about the sellers.

We purchased a second home in October 2024 via ” highest and best” because the area was hot and few homes came on the market. The new home is 4 hours from our permanent home, so our daughter who lives near the new home, did a facetime walk through with the realtor. We had to submit our best offer before a scheduled open house the next day.So, we did, and our offer was accepted. It was scary and we possibly overpaid but we really wanted that location. The previous owner made some upgrades that are not at all my taste, but I cannot justify making all of the changes. I got rid of all carpet, got rid of a gray room……and I am very anxious to remove that hideous stainless steel range hood!

In a very hot market in Calgary our realtor did an open house and ran the ad on line with even a to scale floor plan we had multiple offers but one guy persisted and the house sold above our ask in 5 days done . We were informed of the offers as they came no problem I undestand the process is different in the US just like in Aus where all homes are sold on the auction system. I am not sure which is better .

I've bought and sold homes both ways - generally it's depended on how hot the market was. I've always used an agent, and gone with their recommendations on which system to use (based on their assessment of the market). While I've never been disappointed with the results, I really hated the agent coming back repeatedly with negotiated changes for me to approve or counter, sometimes telling me I was in hot competition with another potential buyer.

" By keeping all bidders entirely in the dark, does this system leave money on the table "

It's not blind, in the sense of the bidders can see the home, and sometimes still put terms in the bid (such as an inspection). It depends on how hot the market is. Does it leave money on the table? Possibly, but it is generally a lot less stressful for the sellers, and they may be willing to forfeit a slightly higher price to relieve themselves of the bidding stress.

" Or does this system push buyers to their limits? Are these actually the highest and best offers? "

No one will ever know, not even the potential buyers. What would they have done if there had been counter offers. They don't know until it happens (even if they think they know).

" What are listing agents actually doing for their clients to earn their commissions today? "

They know the market in ways that can't be seen by perusing other listings, they know the laws and make sure I stay within them, they arrange photographing and staging my home, they deal with the showings, and they deal with the paperwork. And, if there is any counteroffering, they deal with the other party.

Edited to add: " the sellers are blind to the bids coming in. "

It's no different than bids coming in on the same day in a more traditional sales method, and the agent sits down with the seller at the end of the day to go over the bids and decide whether any of them should be accepted or countered.

We put in our offer on our home in 2020 in rural California. Our agent informed us that if other interested buyers were to inquire, they would be informed of our offer price and presumably outbid us. So not blind at all.

So we included a 24 hour clause (next business day by 5pm) to be accepted or our offer would be withdrawn. It was a good offer 2% over asking and was accepted almost immediately.

Of course it depends on the local market, ours has slowed. In general it's always best to list for a fair price to attract attention. Overpriced properties sit and become stale and make buyers wonder what is wrong with the property.