What Does Best And Final Mean in Property
In today’s property market, ‘best and final’ is a term that’s becoming more and more popular. Demand for housing has remained strong whilst supply has been quite restricted, which has made for a seller’s market. This means that, particularly on very popular properties, vendors look for a way to pick the best possible offer for their property. Estate agents often use a best and final offer method so that the vendor can choose the best buyer.
If you find yourself in a situation where you’re asked to make a best and final offer and you’re unsure of what it means, or what to do, then this is the guide for you! We’ll walk you through what a best and final offer is and why estate agents use them, how the process works, what you can include to make a good best and final offer, and how you can avoid being gazumped at the last moment. If you’re looking for a specific point relating to best and final offers, such as what to include in your offer, then use the menu below to navigate through the article more easily. Otherwise simply read on for the full guide!
What Is a ‘Best and Final’ Offer?
A best and final offer in property is a prospective buyer’s last and best (i.e. highest) offer that they’re prepared to make for a property. A best and final offer is a way for the property vendor to decide on a buyer without having to go through the negotiation process with each individual buyer. It helps the seller to sell their house fast and means that they will usually achieve a higher price for their property, as it generates a ‘bidding war’ type of scenario.
Why do Estate Agents do Best and Final Offers?
When a seller is presented with a number of different offers, going to best and final offers can be a simple and smooth way to choose the best offer. This allows the vendor to see all the information together at the same time, including the prospective buyer’s situations. It also tends to result in a higher price for the property because of the bidding war dynamic it creates. Which is obviously great for estate agent’s commissions!
Best and final is typically only used as a method for sale where there are a number of similar and competing offers. If there is a clear leading bid then this method of sale is not required as the vendor would typically just accept the best offer and discount the others. Using best and final can help to accelerate the time it takes to get the property under offer, and therefore means that the vendor can sell their house faster. Check out our guide for more information on how long it takes to sell a house in the UK.
How do Best and Final Offers Work?
Best and final offers happen after your initial offer has already been submitted to the vendor. Usually the estate agent will contact you to inform you that as a result of the popularity of the property it is going to best and final. The process will differ depending on which agent is selling the property. But in general the process is similar.
Normally you’ll be sent an email (which will go to all prospective buyers) or given a call detailing the information that you need to submit for your best and final offer. Estate agents like to move quickly at this stage, so you’ll probably have to submit your offer within the working week. You don’t necessarily have to change your offer at this stage, it’s just the agent giving you the opportunity to do so.
How to Make a Good Best and Final Offer
Making a good best and final offer depends as much on your situation as it does on the price that you offer. Make sure that you provide the seller with as much information as they need to make an informed decision about your offer. Typically you will want to include:
- The Price. Obviously!
- Your ability to proceed. This is particularly important in today’s property market. If you’re a chain-free buyer and you’re not dependent on the sale of your own property, make the most of that fact. Lots of sales fall through because of this reason and sellers are wary of chain buyers and property chains in general.
- Speed. How quickly you’re able to move on the transaction can be important to some sellers, so make sure you include this information.
- Source of funds. Let the seller know if you’re a cash buyer or you’re depending on a mortgage. If you are using a mortgage or if you’re remortgaging your current property then you should let the seller know if you have your mortgage in principle agreed already. Sellers may often prefer a cash buyer, as mortgage buyers will require a mortgage valuation. At this stage, the property may be ‘down valued’ and the lender may decide that they don’t want to lend on the property, which could cause the sale to fall through.
All of this information helps the seller and will be verified at a later stage, so make sure that you’re detailed, honest and transparent. Remember this is your last chance – so present yourself and your offer in the best possible light!
Is a Best and Final Offer Legally Binding?
No. The seller has no obligation to accept your offer nor do you have any legal obligation to follow through with your offer. Offers on property are not legally binding. In fact, nothing is legally binding until you are exchanged on the property. Although you will typically incur costs going through the conveyancing process to buy the property and conduct surveys etc.
How to avoid being ‘gazumped’
Being gazumped happens when another buyer’s offer is accepted over yours even after yours has been accepted. There’s a couple of things you can do to avoid being gazumped if your best and final offer is accepted:
- Be proactive. This lets the seller know that you’re a serious buyer and that you’re committed to proceeding with the sale at a reasonable pace. Make sure that you submit documents on time and keep an open dialogue with your conveyancing solicitor and the seller.
- Build rapport. Meeting the seller face-to-face can really help them see you as a person rather than just a number. It means that they will have more consideration for your personal circumstances. If you have the opportunity to, explain the reason for your move and how much you love the property.
If you’re selling your property and a best and final offer has fallen through then there’s no need to panic. SmoothSale can help. Our cash house buyer service is set up such that we can purchase your property from you for cash in as little as 7 days. The service is completely fee-free and we will even cover your legal costs. We buy any house, in any condition, so if you want to find out more information about our service then give us a call on 0800 368 8952 or simply get a cash offer today!