The UK is still in a housing crisis, meaning the demand for housing is as strong as ever. It’s a seller’s market. So, if you’re thinking of putting your house on the market, the interest in your property could be high.
‘Best and final’ is a term that is becoming more commonplace in estate agent jargon due to the increased demand and lack of properties faced by the property market. Vendors with properties that are likely to be extremely popular in their area understandably want to get the highest possible price for their home; with potential buyers often putting in offers above asking. With these types of sales estate agents will often use the ‘best and final’ offer strategy to get the best sale for the vendor.
If you’re browsing the market for a new home, you may be expected to make a best and final offer on a property you’re interested in. This means the stakes are high, and you may need to be tactile when it comes to putting in an offer. Sound daunting? We Buy Any Home have you covered. Our guide below WILL define what a best and final offer is in more detail, highlight how they work, and how you can make an educated best and final offer.
- What is a best and final offer?
- Do estate agents use best and final offer tactics on all properties?
- How do best and final offers work?
- How to determine your best and final offer strategy
- Best and final offer rejected
- Are best and final offers legally binding?
What is a best and final offer?
Has your estate agent told you that there are a lot of interested parties putting in offers on a property? Are you one of a multitude of people viewing a home? Don’t be surprised if the agent encourages all committed buyers to submit a final bid on a property.
It can be overwhelming for a vendor to assess offers coming in on their home, especially if there’s a high volume. To allow the seller to see all the offers at the same time (and the potential buyers positions) the agent will ask for best and final offers to be submitted by a certain date and time. This often results in a higher price for the seller as parties are more likely to offer above asking to secure the property they want.
Do estate agents use best and final offer tactics on all properties?
The best and final offer strategy doesn’t suit all vendors. If there is a clear leading offer, or the property has only received a few offers, this style of sale wouldn’t be appropriate. Collecting best and final offers is worthwhile when the vendor has an overwhelming number of interested parties in their property and keeping track of offers is difficult otherwise.
How do best and final offers work?
Typically, you will receive communication from the estate agent managing the sale of the property you’re interested in. They may voice to you that there has been an influx of interested on the property and, therefore, they’re asking all potential buyers to put in a best and final offer by a certain date and time. The offer will also contain details on their buying position as this can influence who a vendor chooses to go ahead with and complete the sale.
Is a best and final offer the same as a sealed bid?
Best and final offers work very similarly to sealed bids – both methods require interested parties to submit an offer by a certain deadline. Sealed bids are submitted in a sealed envelope and are not opened by the vendors until the deadline has passed. They will then choose the buyer they wish to proceed with. In comparison, best and final offers are not sealed; offers will be reviewed as they come in up until the deadline. Once the deadline has passed the vendor and the agent will evaluate all of the offers and discuss who to proceed with.
How to determine your best and final offer strategy
If you’re in a position where you need to make a best and final offer it can be a nerve-wracking experience. You won’t have any knowledge on what other interested parties are putting forward, nor how many other best and final offers will be in the mix. It is best to give the vendor as much information as possible. This should include:
- Your offer
- Whether you’re a chain free buyer or are dependent on the sale of your property
- How quickly you can proceed with the purchase
- Whether you have an agreed mortgage in principle or are a cash buyer
It’s not just down to the financial offer you put forward, although vendors will understandably be attracted to offers equal or better to their asking price. Being a chain free and/or cash buyer are attributes attractive to a seller, and there is a chance they would select a buyer of this nature even if they didn’t offer the highest price. Who a vendor selects is based on their personal requirements so being honest and transparent with your best and final offer is key.
How much should your best and final offer be?
This can be tricky; you don’t want to miss out on the property, but you don’t want to feel like you’re paying above and beyond. Sit down and assess how much you would truly be willing to pay for the property. Submitting this maximum offer means that, even if you don’t secure the home, you could not have offered anything more.
How do I make the best and final offer?
Your offer, and the additional information, will need to be supplied in writing. This can be done via email, or a letter dropped into your agent if they have an office – whatever is easiest for you. Don’t forget to include details on your buying position, timescales, and whether you have a mortgage in principle or will be paying cash. Include as much information as possible to show honesty to the vendor and help make their selection process easier.
Best and final offer rejected
Your estate agent will contact you whether your final and best offer was successful or not. If the seller has decided to accept an offer from another party but you’re still interested in the property, make this known to the agent. They will be able to let you know if the sale falls through and keep in contact should anything similar come on the market.
Are best and final offers legally binding?
There is no legal definition as to what constitutes a best and final offer. It is down to the estate agent and vendor as to how the method is used for a particular property. Vendors should be aware that best and final offers are not legally binding. This means that whoever is selected after the deadline could retract their offer. It should be remembered that nothing is legally binding until exchange. Likewise, a vendor could pull out of selling completely, leaving those who submitted best and final offers back to searching for their dream home.
Are you in a position where a date has been given for a best and final offer on a property you want to buy? Would you like to make yourself more attractive to the vendor? We Buy Any Home offer a cash house buyer service. We can buy your property for cash, allowing you a fast house sale when you need it most. Get a free cash offer today!