Best and Final Offer

the_boot

Until yesterday I had never heard of this practice.

I found a house that I really liked, put in an offer, and another party also appeared and put in an offer.

The Estate Agent then informed me that the sale was now going to Best & Final Offer, and gave a brief explanation explaining that it's purpose was to avoid a bidding war.

In hindsight, I would have preferred a bidding war. It seems to me that is the fairest practice - the Vendor would achieve the best price for their property, and the buyers would not be put in a position where they could potentially panic and offer way over what he other buyer (the market) would pay.

Obviously I lost. The other buyers offer was exactly the same as mine (the full asking) and the Vendors chose between us.

Any comments on this practice? To me it lacks transparency.

Of course, legally an offer could still be submitted afterwards, but if the Vendor were to accept, that would technically be Gazumping right?

marksoton

the_boot wrote: »

Obviously I lost. The other buyers offer was exactly the same as mine (the full asking) and the Vendors chose between us.

So accept that and move on. The vendor obviously chose for a reason.

You can procrastinate all you want but i'd spend my energy seeking a new property.

the_boot

marksoton wrote: »

So accept that and move on. The vendor obviously chose for a reason.

You can procrastinate all you want but i'd spend my energy seeking a new property.

Fair point but I think it was more of a coin flip decision.

My gripe is more with the Agent for putting all parties in that position of non transparency.

I'm just wondering if it would be a good idea to put in a higher offer.

alchemist.1

the_boot wrote: »

Fair point but I think it was more of a coin flip decision.

My gripe is more with the Agent for putting all parties in that position of non transparency.

I'm just wondering if it would be a good idea to put in a higher offer.

The agent doesn't act for you, so essentially doesn't care whether you feel it is transparent or not.

Was the buyer a cash buyer? Had a higher deposit? Good relationship with the estate agent? All of these can make a difference.

G_M

Either forget it and walk on.

Or make a higher offer. To the estate agent and/or direct to the seller.

Best and final offer does not always mean 'best' or 'final'!

henrik1971

The agent is acting for the seller. Going to 'best and final' is ideal for the seller as he is offering you both one final chance to make an offer to secure the property. As you say, this could lead to someone over-paying because they are worried about losing out.

In a bidding war, the high bidder only has to go £1 or £100 (or whatever) above the underbidder. In best and final the high bidder could easily be several thousand above the underbidder.

When we sold our last house two years ago, we had to go to best and final. The property was on for £135k, the two interested parties had previously offered £122k and £123k. The agent then asked them for best and final and the two offers went up to £129k and £134k. Great result for us.

Davesnave

henrik1971 wrote: »

In a bidding war, the high bidder only has to go £1 or £100 (or whatever) above the underbidder. In best and final the high bidder could easily be several thousand above the underbidder.

I don't believe this is correct. It may be what happens most of the time, but a vendor is free to sell to whoever they like.

I agree with GM. Bid again, or move on.

Sedge123

We went to best and final offers to avoid the bidding war where one person increases by a but and then the next does etc etc. We actually didn't accept the highest offer as they wanted a quick move which we couldn't accommodate. It's obviously about the best price but also from s sellers point of view it's about the other things eg chain or no chain, deadlines, buy to let or not etc.

davidmcn

henrik1971 wrote: »

In a bidding war, the high bidder only has to go £1 or £100 (or whatever) above the underbidder. In best and final the high bidder could easily be several thousand above the underbidder.

Davesnave wrote: »

I don't believe this is correct. It may be what happens most of the time, but a vendor is free to sell to whoever they like.

I don't think henrik was commenting on whether they're obliged to accept a particular offer, just that it's better from the seller's point of view.

In Scotland the norm if there are competing buyers is to set a closing date, where buyers generally only get one shot at it. Sometimes the winner will be miles ahead of the second best, other times they are all thinking of the same number (usually only the seller who ever knows what all the bids were though!).

kinger101

Davesnave wrote: »

I don't believe this is correct. It may be what happens most of the time, but a vendor is free to sell to whoever they like.

I agree with GM. Bid again, or move on.

You're right. The EA would most likely also advised the vendor on the predictability of the vendor, and whether there was a chain. All things being equal, someone with a 75% mortgage for example would be better than someone with a 90% IMO. If the bank's valuation fell short, I'd imagine 10% deposit might not be able to proceed. Of course, some EAs might cast a positive light on bidders whom use their mortgage broker etc.

cashbackproblems

I have been in this situation twice and rejected both times, however i offered what i felt it was worth based on recent sales and what else is otherwise on the market along with my maximum budget so no rejects. You cant have any emotions involved its ultimately an asset and in January there will be many more properties coming to the market, along with big sell offs by BTL.

And yes the highest offer wont necessarily be accepted, they would look at your deposit, MIP, if your chain free etc.