Best and Final Offer
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Best and Final Offer Explained
Sometimes buying a home can become competitive – especially when various buyers are all interested in the same property. An agent might ask you to submit a ‘Best and Final Offer’ – but what does this mean and how can you improve your chances of success?
What is Best and Final Offer?
If a property is proving popular and various people want to make an offer, an estate agent will sometimes ask buyers to submit a Best and Final Offer by a certain date and time.
You might assume that the property vendor will simply accept the highest offer. Sometimes other factors can be important too – for example whether the potential buyers are in a chain, or can move quickly.
A similar process to Best and Final Offer is a sealed bid. This slightly more formal approach, involves interested parties putting details of their offer in a sealed envelope.
Estate Agents have a legal obligation to put all offers to their vendor at any point while a sale is still subject to contract. Few agents advise buyers of this.
Is a Best and Final Offer legally binding?
The purpose of a Best and Final Offer is to make it easy for the vendor to decide which offer to accept.
When selling a house it’s normal for a viewer to make multiple offers that increase in value until accepted. Best and Final Offer speeds up the process, avoids a bidding war and ensures that everyone involved is serious about buying the house.
The offer you make is not legally binding, however. Even if you are the chosen buyer, you or the vendor can pull out at any point before contracts are exchanged.
What is gazumping?
Gazumping is the name for a situation where a vendor accepts your offer, then later backs out because someone else has offered a higher amount.
It can be very frustrating if this happens several weeks into the buying process, as you may have spent money on searches, surveys and solicitors’ fees.
Gazumping only happens in Northern Ireland, England and Wales, as in Scotland the property laws are different.
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The Mortgage Company was established over 30 years ago and have a strong reputation for being local mortgage experts.
How can I get my offer accepted and avoid being gazumped?
You might find the process becomes a little emotional if you find your dream home but others want to buy it too.
It can be tempting to pay over the odds for the home, to ensure you beat the competition. But bear in mind that the value is very important – if your offer is higher than your mortgage valuation, you may not get a loan.
Our tips to give you the best chances are:
- Make sure the estate agent knows all the positives about you as a buyer – for example, that you already have a mortgage Agreement in Principle, if you’re not in a chain or you already have a buyer for your current property.
- Have proof of deposit to hand.
- Consider how much the property is worth to you: that should be your offer. Ignore the competition: if the house goes to another bidder it was not meant to be.
- Ask about the vendors’ circumstances and tailor your offer if possible. For example, if they want to complete in six weeks, stress that you can meet this – as long as you can!
Finally, say that your offer is subject to the agent taking the property off the market. This can prevent other buyers jumping in with a last-minute offer.
What if my offer gets rejected?
If you have made an offer on a house and the vendor chooses another buyer, there isn’t much you can do. The purpose of the Best and Final offer process is for the vendor to select a buyer and progress the sale.
Try to stay positive and objective – there are lots of homes out there and an even more perfect property could be just around the corner. If you talk to homeowners, they will often tell you that missing out on one house meant that they found an even better one.
How can a Mortgage Broker help?
It’s very helpful to have the support of a Mortgage Broker in your homebuying process. We spend time with you to understand your financial position and your property goals, and then help you achieve them.
We’ll find suitable lenders and get you a mortgage Agreement in Principle. We’re here to help you at every stage of the process – from setting your property budget through to making an offer, the exchange of contracts right through to picking up the keys to your new home.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE