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What does a best and final offer mean?

best and final offer

What does a best and final offer mean?

As best and final offers are cropping up quite frequently in the strong summer market we are having. It’s something that everybody from first-time buyers to those higher up the property ladder has experienced recently and can be extremely important in securing your next home. So, we’ve broken down what a best and final offer means and what to do if you have to give one. 

What is a “best and final offer”?

A best and final offer is when the seller and/or estate agent invites all prospective buyers of a property to submit their best bid for the property. The process is sometimes known as ‘sealed bids’. These bids are all blind bids so each buyer doesn’t know what the other bids are. It is then up to the seller to choose the offer that they think is the best.  Whilst there is no legal stance on a seller accepting bids after receiving the best and final offers, this is not seen as best practice. With the market being so buoyant at present, a seller and agent see this as one of the best ways to select a buyer.

Which offer is best?

There are many reasons for a seller to go with a particular offer however, there are a few common themes that we can see. The most common reason for an offer being accepted is simply the highest bid. It is of course in the seller’s best interest to get the best price for their property. So a bid over the asking price is often the one that’s accepted. However, the largest offer isn’t always the most secure. An offer significantly over asking price could potentially cause an issue later down the line, as the property could be down-valued following a survey. Whilst price plays an important role other factors such as cash offers and whether the buyers are in a chain can also have sway a decision.

If there is a cash offer for the property then a seller may be more interested in accepting it  as the cash offer is more likely to be processed quicker than applying for and securing a mortgage. In addition, if a buyer has their own property to sell, this can also affect the decision as being part of a ‘chain’ can also slow down a house purchase and is considered a higher risk. So cash, mortgage and chain information can all be bargaining tools when negotiating a sale.  

Finally, it’s important to note that the practice of best and final offers is not legally binding under UK law. The practise isn’t regulated like a property auction and the seller is not obliged to choose the best or any of the offers that they receive.

Overall, the best and final offer is when an estate agent invites you to make a blind offer for a property. You can find out how much your property’s asking price might be by checking out our free online property valuer tool here.

And if you want to speak to an estate agent about valuing your property for a true purchase price get in touch with us here.

Thomas Allen