Best and final offer approach. Good or Bad?

DAVESQUARED

My son and partner are in the process of buying their first property and after months of searching found a house that they wanted to put an offer in (after a second viewing).
At the end of the second viewing the owner told them that another person had just viewed the property the day before and offered just over the asking price (which was £215k) but since my son had viewed already he wanted to give them the chance.
So the following morning my son contacted the agent and asked what the current offer was to be told they could not say "due to data protection laws" (which is a whole different rant) and that they were asking both parties to offer the best and final offer.
SPOILER ALERT they didn't get the property but that's not the reason for the post here.
My son, myself and several friends that I spoke to had never heard of this approach and my thoughts were that it was not sensible for my son to put in a high offer as he would potentially be paying over the odds. Instead he put a reasonable offer in of £216.5k and informed the agent that "this was not his best nor final offer and that he would like her to pass this onto the client" The agent, apparently got seriously stroppy saying that "they did not have to pass this message on", but eventually did this and long story short the bid was too low and the seller was quote "not happy that they had not put in their best offer".
Now as someone who has recently been a seller of a property (executor of an estate) I would have gone ballistic if the agent had not informed me that a seller had said they were willing to increase their offer if necessary to beat the other.
Also as a seller I see absolutely no point in doing anything other than openly asking people to bid to the highest amount. It's effectively an auction and no one pays more than they have to or more than they can afford to.
As a buyer I detest the idea of bidding a figure to be higher than an unknown amount. Imagine if my son had bid £225k against an offer of only £217.
It looks like the house went for not much more than the asking price so probably about £217 which means that the both the seller and my son lost out.
I know that sealed bids are common particularly in London but that is a far different process as i understand it in writing and to a predefined timescale. When there are only two or three people interested in a property I find this "make me your best offer" approach quite offensive and in neither parties interest. The agent kept going on that it was "fairer" but I just don't agree a house is what someone is worth paying for it and they can only be found with transparency. I wondered what others thought.

LawAbiding

So this is the situation I found myself in.

THe house which took our interest had been first put up in August 2018.

Throughout that time, it hasn't sold. We view the property and then view it again and all of a "sudden" there is another interested party who has given an offer of £240k.

The house was marketed at £250 offers above.

I didn't want to miss this house as we had been looking for a while and it ticked all the boxes, so I put an offer in for £245k and it got accepted straight away.

My thoughts now are, my original offer was going to be £240k and I made this clear to the EA at the first viewing.

Was there even a second potential buyer, was there even a £240k offer from this person?

Or was it all made up to force me to bump my offer up?

They had the same language, give us your final and best offer..............

I call it BS

Marvel1

If I was seller, and 2 or more are interested, I don't wan't to be hassled with offers back and fore, so therefore I would want best and final offer. If I had that quoted to me - this is my offer but not my final offer. I would have nothing to do with you and foxtrot yankee, I don't have time for games.

Slithery

'Best and final offer' is quite common. EA's want to sell a property with as little work as possible, rather than spend hours and hours trying to get a slightly higher price which will only get them a few more quid in commission.

ReadingTim

So, let me get this right - your son was told best and final offers, chose to ignore that, lost out because he was playing games, and now you've got the hump because the estate agent was telling the truth all along....?

Jeeze, ain't no pleasin' some people.

Doozergirl

It's totally normal if there is more than one bidder to stop the to-ing and fro-ing and let people decide what something is worth to them. I've been there plenty of times.

It seems that £216,500 was your son's best offer.

If your son was offering what he thought it was worth and did buy the house, then he would (or should) have been satisfied with the outcome, regardless. Unless we're standing in an auction, none of us know what other people (competitors, for want of a better word) have valued a house at some can only go on our own gut followed by (mostly) our mortgage lender's valuation.

Playing games when other people aren't isn't going to get you anything. He was never entitled to know what the other offer was. I don't even understand the point of making an offer and expressly saying you'll pay more...

eddddy

DAVESQUARED wrote: »

Best and final offer approach. Good or Bad?

It is what it is - I guess.

You understand the rules and the parameters, and you can choose to get involved or avoid it.

Everyone realises the implications if they offer, say, £250k whilst the next best offer was, say, £210k.

DAVESQUARED wrote: »

Instead he put a reasonable offer in of £216.5k and informed the agent that "this was not his best nor final offer and that he would like her to pass this onto the client"

I have to say - that was a bit daft. Why would anybody accept an offer described in that way?

If an EA had passed that offer to me, I'm pretty sure my reply would be "OK, tell them I'm rejecting their offer, and ask them for their best and final offer."

DAVESQUARED

Marvel1 wrote: »

If I was seller, and 2 or more are interested, I don't wan't to be hassled with offers back and fore, so therefore I would want best and final offer. If I had that quoted to me - this is my offer but not my final offer. I would have nothing to do with you and foxtrot yankee, I don't have time for games.

I guess if you sell houses every day for a living (ie like a lazy estate agent) then a dozen phone calls to agree the final and highest bidder but for the average person (and this couple that had lived there for 10+ years) I'm not sure why people would worry about a few phone calls every decade or so when they sell a house.

Slithery wrote: »

'Best and final offer' is quite common. EA's want to sell a property with as little work as possible, rather than spend hours and hours trying to get a slightly higher price which will only get them a few more quid in commission.

That was my guess that this is more the estate agent not really caring about the negligible difference in commission and not just looking for an easy life that doesn't benefit any parties other than them.

ReadingTim wrote: »

So, let me get this right - your son was told best and final offers, chose to ignore that, lost out because he was playing games, and now you've got the hump because the estate agent was telling the truth all along....? Jeeze, ain't no pleasin' some people.

I haven't got the hump at all, plenty more fish in the see and to be honest better ones. My point is that as far as I can see this approach is relatively new (or at least more common now than it used to be) and I can't see how it benefits anybody. My son didn't ignore it he put an offer in that was on the low side (and it would appear that so did the other party) and was slightly lower. I have no issue with that as the same could have happened in an open auction if the other party had deeper pockets. But what I know for a FACT is that the seller has now sold for a lower price than they could have got.
As a seller I don't see the benefit and as a buyer I see it as game playing which is likely to make me walk away.

sheramber

SO , what was your son prepared to pay?

It may still have been less than the other party paid.

Also, if your son was given a second chance it would only be fair to offer the other party to increase their offer too. So he may still have lost out.

Where do you stop?

The seller wanted a sale , not an ongoing barter.

Final and best offer is normal in Scotland when the sale goes to a closing date. You get one chance and one chance only.

Doozergirl

Your son was game playing. He was trying to move the goalposts by turning it into an auction and taking advantage of someone else's genuine best and final.

Some vendors are just happy to sell to sell to the first person.

It may well be that the other buyer was better placed anyway, but they were certainly first to put their cards on the table in the form of an offer and then again in the form of a B&F, no silly beggars.

Vendors make decisions on all sorts of things, not just the money. If there was £1,000 in it then I'd be looking very closely at WHO I wanted to sell to.

eddddy

This really, really really isn't any of my business, but...

...is there an element of guilt here?

Did you perhaps advise your son how to approach this, and it all backfired? _pale_