What Does Best and Final Offer Mean?
Estimated reading time 7 minutes
You might have heard the term, but what does it mean? Whether you’re buying, selling, or thinking about your next property move, understanding the term ‘best and final offer’ is essential.
In this guide we’ll shed light on it all — the meaning of the term, as well as its purpose and how to navigate the process. We’ll also look at how to get the most out of it by exploring some best and final offer tactics, to help ensure the best outcomes for you.
What is a best and final offer?
In the property industry, a best and final offer (or BAFO) describes the chance for all buyers interested in a particular property to submit what will usually be their highest and most attractive bid.
This usually happens following some initial viewings and offers from more than one interested party.
What is the purpose of best and final offers?
If a property for sale has just one interested buyer, it’s likely that the seller will request best and final offers. The best and final offer is about competition. It ensures that the seller gets the best price for their property as they can compare the offers. Plus, it can intensify the sense of competition, which can drive offers even higher.
Requesting a best and final offer can make the selling process quicker too. Rather than engaging in negotiations piecemeal, the buyer provides their price and terms, and the seller can review and compare the various buyers’ offers and make a decision more quickly.
Last of all, the best and final offer process affords more transparency in the process. All buyers have the same opportunity at the same point in time. This means there is less risk of perceived injustices. Every buyer gets a fair shot, and an opportunity to play any aces they may have kept up their sleeve initially.
How do best and final offers work?
The catalyst is several buyers being interested in the same property. This might come in the form of inquiries or actual offers, or a mix.
The estate agent will probably recommend to the seller that they move ahead with a best and final offer process in light of the level of interest. If the seller agrees, they will notify all potential buyers, and will mention a deadline by which all best and final offers will need to be submitted.
The seller will then consider the best and final offers. They may accept one of the offers, reject all of them, or they may start negotiations with one or more of the buyers. They are not obliged to accept the highest bid or most attractive one, but a best and final offer is usually binding once accepted.
What are the top best and final offer tactics?
Competitive figure
Do your homework on the local market. Look at recent sales of similar properties. Research the property and its history. From this, you can determine a competitive price (subject to survey and contract) that will ensure you’re in the running, but not paying over the odds.
Clarity is key
The seller is looking for the benefits of selling to you, so don’t make them hunt for them amongst waffle about your passion for Georgian architecture. Set out your key details so the seller can’t miss them. Don’t expect the seller to read between the lines or to draw the right conclusions.
Keep it short
Again, remember the seller will be considering multiple offers. Make it easy for them to read yours. The last thing you want to make them feel is frustration.
Show your strengths
It’s not just about the amount of money you’re willing to send the seller’s way. You need to show that you’re committed to proceeding with the sale and that you’re able to do so. But more on that next.
What to include in a best and final offer
A best and final offer needs to be in writing. Most estate agents will accept email or letter, the main thing is you’re providing a clear record of your terms and your offer.
Your best and final offer should answer the following questions:
- What’s your offer price?
- What’s your buying position?
- What’s your timescale?
- Do you have a mortgage in principle?
- Are you buying with cash?
- Are you part of a chain?
Winning best and final offer tactics
A best and final offer isn’t a simple numbers game. There are plenty of ways to subtly (or not-so-subtly) tip the odds in your favour. Here are some of the most powerful ways to win:
Add some personal touches
Along with the offer, include a personal letter or note to the seller. Introduce yourself and your family and explain why you fell in love with the property. Personal touches are proven to make you appear more trustworthy. Sellers may perceive you as less likely to get cold feet or go back on any terms.
Offer to work to the seller’s timescale
If the seller was happy to dawdle and to draw out negotiations, they likely wouldn’t have requested best and final offers. So demonstrate that not only do you understand they won’t want to hang about, but you can actively help them move on and start their next exciting chapter.
If you’re a chain-free cash buyer, mention it!
This is a huge advantage, and likely to be extremely appealing to a seller. It offers them greater certainty and a shorter timescale, given that around 1 in 20 property transactions fall through due to chain breaks.
The truth about best and final offers: Cash is king
So you’ve learned the ins and outs of best and final offers, and hopefully grasped some winning best and final offer tactics. But what if there was a way to significantly strengthen your position in the competition? You could become a cash buyer.
Being a cash buyer has some distinct advantages. For one thing, you represent a smoother sale for the seller. No more waiting for banks or worrying about fall-throughs.
Then there’s the competitive edge. Cash offers are considered the most reliable and attractive option for sellers. This means that even if your offer isn’t the highest you can still come out on top.
If this sounds good, the best news is yet to come…Becoming a cash buyer is much easier than you think. In fact, at SellHouseFast.co.uk our process is the most personal, smooth and efficient yet, and as we buy any house UK-wide, it’s not just your buying that will be simplified, but you’ll be able to sell your house fast too.
Contact SellHouseFast.co.uk today for a no-obligation free cash offer, and to learn how we can help you get the property of your dreams.
