A homeowner always wants to get the best possible deal when selling their house.
In many cases, this could involve inviting a ‘best and final offer’ from all interested parties.
Read this blog to find out what this means.
What is a ‘best and final offer’?
A ‘best and final offer’ is the highest amount a potential buyer is willing to pay.
Usually, all interested buyers will be asked to submit their best and final offer by a certain date. This allows the seller to consider each offer simultaneously.
Best and final offers vs sealed bids
Best and final offers are similar to sealed bids, which also need each buyer to submit their offer.
However, best and final offers are generally more informal. They don’t require each bid to be submitted sealed in an envelope.
Reasons to use a best and final offer
Many interested parties
When you’ve got lots of interested parties, asking for a best and final offer can encourage negotiation.
You’ll demonstrate that there’s more than one person interested. And the buyers are arguably more likely to put their best foot forward.
Put pressure on buyers
Setting a date to receive a final offer puts pressure on buyers.
It may encourage them to increase their offer. And it also ensures that they move at a pace that you’re happy with.
Losing track of all the different numbers
Keeping track of all the offers you’ve received can be challenging when there’s lots of interested people.
After several weeks or months, you might forget who’s offered how much, and thus what your options are. Asking for a best and final offer can ‘clear the fog’ and make it easier to keep track.
Save time
Timewasting is not uncommon in the housing market.
Often, you’ll be messed around by potential ‘buyers’ who aren’t viable candidates. Setting a date to receive best and final offers can speed up the time it takes to sell a house.
How often do sellers ask for a best and final offer?
This largely depends on the market conditions.
This strategy is mainly used when a seller has several interested parties. So, during periods of stagnation and high interest rates, it’s rare to find a seller asking for this.
By contrast, when it’s a seller’s market and activity is booming, asking for a best and final offer becomes far more common. So, the regularity of this approach moves with the market.
What’s a good best and final offer strategy?
The best and final offer isn’t necessarily only focused on price. All sorts of factors can make a buyer seem attractive to a seller, such as:
- How quickly they can exchange contracts
- How secure their financial situation is
- Any preferences they have for the property.
You should get your mortgage in principle before you submit your best and final offer, so you can include that in your correspondence.
You should also ensure you have a solicitor or conveyancer on hand and ready to go, so you can instruct them as soon as your offer is accepted.
You can speak to the estate agent to find out how many people are interested in the property and will be making their best and final offers. You may ask if any offers have been made previously and how much they were for.
For example, if bids have been made and rejected at asking price, you’ll know that best and final bids will be above asking price.
How to decide on my best and final offer
You shouldn’t offer more than you can afford. Otherwise, you’ll just need to back-out further down the line. It’s not a sustainable strategy.
Sit down and clearly work out your budget. This is a combination of your deposit, and the amount your bank allows you to borrow.
You should then work out whether you think this is a fair price for the property. You may want to offer lower if it’s overvalued. Get an expert’s opinion as well.
Can I change my offer after submitting the best and final offer?
Yes, you can. Your offer is not legally binding, so you can always adjust it if you change your mind.
The sale will not complete until contracts are exchanged, so you have until then to update your offer, negotiate, or pull out of the sale completely.
Will the seller always pick the highest offer?
Sellers will not necessarily pick the highest best and final offer. If another buyer looks like they can move quicker, or they have a more secure financial situation, the seller may prefer them.
The seller is not under any obligation to pick any offer at all if they don’t want to.
If every buyer’s offer is unsatisfactory, they can choose to negotiate alternative offers. Or they can leave the property on the market for a new buyer.
Our best and final offer email template
There is no specific wording you need to use when making your best and final offer. It is not a legally binding process, and it will be similar to making any other offer on a property.
You should first discuss your offer and financial situation verbally with the estate agent before following up with written confirmation. An example best and final offer email template would include:
Dear [name]
I am writing to submit my best and final offer for [property]. My final offer, subject to contract and survey, is £[amount].
I [and my partner/family] am/are very interested in this home because of [reasons, i.e., the location, the property itself, etc.]. 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 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.
Should my offer be accepted, I would expect the property to be removed from the market, so we can continue to the completion date swiftly.
Thank you for considering my offer. I look forward to hearing from you.
With best wishes
[name]
Other considerations
Each case is unique
Of course, your situation may differ to the above example. You should ensure that you give as much information as possible about your situation. Especially over factors that will make you an attractive buyer.
For example, you have plans in place that reduce the risk of the sale failing, such as a mortgage or you’re a cash buyer.
Always include ‘Subject to contract and survey’
When you make an offer, you should always include “subject to contract and survey”.
You can also use this opportunity to confirm any expectations that you have from the seller.
For example, if you’ve already discussed what fixtures and fittings will be included.
