What Does Best and Final Offer Mean?
A best and final offer is a term used in the property market where by the seller asks all buyers to submit their highest and most favourable offer to buy their house for sale.
Why ask for best and final offer?
The use of a "Best and Final Offer" strategy is most effective when the seller has received multiple offers for their house for sale. In such a market, the agent acting for the seller may request that all interested buyers submit their highest and best offer, normally by a certain date and time. By asking for best and final offer it can help to clarify the terms of the sale and provide a clear understanding of all the buyer's maximum willingness to pay.
The use of a Best and Final Offer can be particularly effective in a seller's market, where demand for housing is high and supply is low. Which according to Rightmove is the current state of the UK property market as at the beginning of the year, buyer demand was up by 4% compared with the same period in the last “normal” pre-pandemic market of 2019 and despite the prospect of more sellers coming to the property market, the number of available homes for sale is still well below long-term normal. By asking for the best and final offer you can save time and stress by avoiding a bidding war between buyers.
How do best and final offers work?
There are normally 4 stages
- Multiple offers received: The seller receives multiple offers from interested buyers, and decides to request a "Best and Final Offer" to determine the highest price that each buyer is willing to pay.
- Request for Best and Final Offer: The seller contacts all interested buyers and requests that they submit their highest and most favourable offer by a specific date and time. This deadline ensures each buyer has the same amount of time to submit their final offer.
- Submission of Best and Final Offer: Each interested buyer submits their highest and most favourable offer, which includes the price they are willing to pay for the property, as well as any additional terms and conditions. For example, if you are a cash buyer, if you can offer a exchange with delayed completion, or can move super quickly.
- Seller's decision: Once the deadline has passed the seller reviews all of the Best and Final Offers and makes a decision about which offer to accept. The seller may choose to accept the highest offer, or may choose a lower offer that includes more favourable terms.
What best and final offer strategy to adopt?
Here are some tips for adopting a best and final offer strategy
- Research the market: It is important to understand the local housing market and the supply and demand for housing in the area where you are looking to buy. This information can help you to determine what a fair and reasonable price for the property might be.
- Determine your budget: Before submitting your Best and Final Offer, it is important to determine what you are financially comfortable spending on the property. This will help you to avoid overbidding and ensure that you can afford the property if your offer is accepted.
- Consider the terms: In addition to the price, you may want to include additional terms and conditions in your Best and Final Offer, such as a flexible completion to suit the seller, include a pre-approval letter if you are obtaining a mortgage, specify if you are a cash buyer to demonstrate how quickly you can proceed with the purchase. Make sure that these terms are clearly outlined as it is not always the highest bidder that wins the property it can often be the one whose terms best match theirs.
- Be realistic: When submitting your Best and Final Offer, it is important to be realistic about what you are willing to pay for the property. Keep in mind that the seller may receive multiple offers, and you want to make sure that your offer is competitive.
- Be prepared to act quickly: In a competitive property market, the seller may receive multiple offers within a short amount of time. It is important to be prepared to act quickly and submit your Best and Final Offer as soon as possible
How to make the best and final offer?
A best and final offer should be made in writing, either via email or a letter as it provides a clear and documented record of the offer and its terms. When making a best and final offer be clear and concise, state the amount of the offer subject to contract and survey. Include your buying position, timescales, whether you have a mortgage in principle, are chain free, buying with cash as well as any other relevant information that you think could sway the seller in your direction.
Gaffsy says .. having a written best and final offer can also help to ensure that everyone involved in the transaction is on the same page, and can provide a solid foundation for moving forward with the sale if the offer is accepted. If you are in a position where a date has been given for a best and final offer on a property you want to buy, you have a property to sell and want to make yourself attractive to the seller call us today as we buy any property for a cash and can guarantee you a fast house sale.
Is a best and final offer legally binding?
In the UK, a best and final offer for a property is not legally binding. Therefore, you can change your offer after submitting it, you can re-negotiate or even pull out completely. As a binding agreement is only formed when both parties have exchanged contracts.
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