What Does Best and Final Offer Mean in Property?
When a seller has an influx of offers on their property it can become complex. You’d think that just picking the potential buyer who offers the most money would be a simple solution. However, with buyers being able to outbid each other, it can become a constantly back and forth between parties determined to buy the property.
Estate agents will often suggest that the seller puts forward a notion to dedicated buyers to put in a best and final offer which they cannot change. In this blog we highlight everything you may need to know about best and final offers from the perspective of a buyer and a seller.
What is a best and final offer?
Best and final offer as a buyer
If you are interested in buying a property and are asked to put in your best and final offer it should be the maximum you are comfortable with spending. It is likely that the seller has received multiple offers and wants to avoid a bidding war or halt a bidding frenzy. It is the fairest way to determine who ends up buying the property.
You will likely be asked by the estate agent to submit your best and final offer by a certain date. The seller will then review these all at the same time and make a decision. You may also be asked to provide your buying position as extra information. For example, if a seller received identical bids but one buyer was not relying in a property sale, they may be a more attractive option.
The best and final offer process is different to sealed bidding – another strategy used in the property world. The best and final offer process is more informal and doesn’t require the amount to be provided in a sealed envelope. Typically an email is suitable.
Best and final offer as a seller
As we have touched upon, selling your home can be complex when you have interest parties trying to out bid one another. This can really elongate the process and be stressful, especially if you are relying on the sale of your home to facilitate the purchase of another.
If you’re trying to sell your house fast or simply want to stop negotiations asking for a best and final offer from dedicated buyers can be a suitable solution. You will then have clear offers and be able to proceed.
Why do people use best and final offers in the UK?
As a prospective buyer receiving a request for a best and final offer may seem high pressure. However, you may not be aware of what other interest parties are putting forward, or how quickly the buyer wants to secure a sale. As a buyer rest assured that it’s nothing personal and simply a solution for a buyer to get everyone’s final offer and make a decision, which ultimately means a quicker process for you too.
As we have touched upon, the best and final offer method makes the buying and selling process a little less stressful. Lengthy negotiations and bidding wars can be avoided. As a seller you will have all of the information you require in front of you to make an informed and final decision.
What is a best and final offer strategy?
As a buyer you may assume that going in with your maximum price and hoping nobody goes higher will secure you the property. However, it’s not just the price that can make you attractive to a seller. In your correspondence you may want to include:
- Your mortgage in principle or whether you’re a cash buyer
- How quickly you’d like to exchange contacts
- Your buying position
- Anything the seller has requested or you might deem as helpful
You can liaise with the estate agent to find out how many people will be putting down best and final offers on the property. You can also ask how many bids were put in before the best and final offer process was put in place and how much they were for. There’s no harm in asking if any rejected bids were below or matched the asking price. How much information you can get from the agent will be down to the individual but there is no harm in trying to put yourself in the best position.
A handy tip from Gaffsy is to have a solicitor or conveyancer ready to go should your best and final offer be accepted.
Can I change my best and final offer after submission?
Whilst a best and final offer is not legal binding it is not best practice to change your mind as a buyer on the value. However, until contracts are exchanged on a property you are legally allowed to do whatever you wish. You can change your final offer, renegotiate, or pull out altogether. The best and final offer process is there to try and make things as streamline as possible but you’re welcome to do as you see fit.
Similarly, as a seller, if you’re unimpressed with the offers or want to pull out of selling completely you can do so. You can negotiate with buyers, initiate more viewings, or try a new estate agent. As long as you carry this out before the contracts exchanged it is fine.
Free best and final offer template
When providing your best and final offer make sure it’s with the agent by the date dictated. There’s no rules on how to provide your offer or what you should say as it is not a legally binding process. Best practice is to discuss your finances with the estate agent and mortgage lender before writing the offer up in an email or letter.
Below is an example of a best and final offer letter.
Dear [estate agent name],
I am writing to submit my best and final offer for [property address]. My final offer, subject to contract and survey, is £[amount].
I feel I am in a good position to move the sale along quickly, or to whatever timeframe suits the seller. I have a mortgage in principle/I am a cash buyer and have a conveyancer ready to instruct and proceed when required. I am chain-free so would be confident that we can reach the exchange date quickly once an offer has been accepted. However, I am also happy to liaise with the seller to discuss dates with them too.
Should my offer be accepted, I would expect the property to be removed from the market.
Thank you for considering my offer. I look forward to hearing from you.
[Your name]
Your position as a seller may be different to the example above. However, you can tailor it to suit your needs. You may want to include information about why you want to buy the property as many sellers are attached to their homes and want someone to love it just as much as they do. You can also use this correspondence as an opportunity to obtain any more information you’d like about the property.
As one of the UK’s leading cash house buyers, Gaffsy can help you have a stress free sale. If you want to avoid going through negotiations and a best and final offer process, get a free cash offer from us today.
