If the ask was 645K and the seller got a bid of 700K would they counter higher? As a buyer I'd tell them to fuck off.

Listing price isn't asking price, it's just advertising to get your foot in the door.

If sellers got more money by listing their homes for $1, they'd be listing their homes for $1.

My realtor says when they have multiple offer and send out a request for "Best and Final Offers", hardly anyone ever changes their offer. They seem to be insulted about being asked for more after bending over backwards by going over ask, waiving all contingencies, etc.

Other bidders are making the decision whether to increase their bid.

I don't remember this was how putting an offer for a house worked. The seller is collecting a bunch of offers and picks the one they like the most. The offers can include escalation clause, but it's still more of a closed auction than the open auction.

Bought a house in SF last year. We lost two offers before securing this place. Both of the lost offers followed this pattern:

1. Set a bid due date 2. Ask three best offers for their "Best Final Offer" 3. We increased our offer (50k 1st case which was generous, 150k second case) 4. Lost, move on to the next showing. In the second case our BFO was 400k over asking, ultimate winner offered 600k over asking. Insanity.

When I sold my house in TX I also did the same: got two offers almost immediately after putting it on the market, so we went back to the buyers and asked for BFO. Both increased their offers.

Funny enough for our third winning offer we saw it the day before the Open House (which just started being allowed again) and put in our offer the day of the Open House. Won for around 50k over asking. I'm not 100% sure but from what I gathered an investor who wanted to rent it as an upstairs/downstairs duplex offered more but they wanted to sell to another family so they took our offer without asking for more money. I was very thankful for that - if they had come back asking for better offers we'd have walked.

The seller doesn't have to accept one of the offers, they can ask bidders to rebid or just let it sit on the market longer. If they got a lot of offers clustered around $700k, they might take the best (which might not be the largest, if there's a difference in contingencies), or they might try to get everyone to rebid, or maybe just the lower bidders to try to go back and forth. Of course, asking for a rebid usually means not accepting the firm bid, and there's a risk of putting off the potential buyers.