Inevitably, all First Time Buyers will come across a UK property where it goes to a best and final offer. This is a tactic that is hated by buyers, but loved by UK estate agents and sellers. When a house goes to best and final offer, the stakes are high, and requires some tactical and strategic planning to win and secure your dream home.
Sections in this comprehensive guide to best and final offers:
- Best and Final Offers Definition (UK)
- Best and Final Offers Myths Debunked
- Best and Final Offer Tactics: How to Win
- Best and Final Offer Letter Template
- Frequently Asked Questions (FAQs) about UK Best and Final Offers
Best and Final Offers Definition (UK)
The textbook definition of a best and final offer is what it says on the tin. The seller, and the estate agents, are inviting all prospective buyers to submit one last offer, all at the same time, and then the seller will choose from the offers on the table. In the UK property market, it is sometimes also called by another name: sealed bids.
This is different from the usual UK property offer process, where buyers can submit offers whenever they want, and sellers must answer each offer as they come in, instead of having all offers on the table at the same time. This is also different from an auction process, as all buyers do not know the price offered by other buyers, and no opportunity to increase their offer later on.
Effectively, the UK definition of a best and final offer situation is a round of bidding by prospective buyers, where there is just one round of bids, and where bids are in secret. Typically, this happens when there is strong interest in the property from multiple prospective buyers. Best and final offers is a strategy by sellers to extract a higher offer.
Best and Final Offers Myths Debunked
However, you might be surprised to know that there is actually no legal definition of best and final offer! Every seller and estate agent can run it differently, the selection criteria can differ from property to property, and it is not legally binding at all.
First myth – the best price does not always win. Many First Time Buyers assume that the highest offer will be chosen. However, in the UK there is nothing legally binding for the seller to choose the highest offer on the table. They might accept a lower offer that has a better financial situation, better chance of getting a mortgage, better chain situation. We have even seen sellers select offers based on whether they liked one buyer, based on their impressions during the viewings! Therefore, take this into consideration when submitting a bid. If you have a strong position, you best and final offer strategy could be to go with an offer that will not be the highest, to maximise your financial return.
Second myth – best and final offers are final, no more offers afterwards. A dirty secret in UK property buying is that offers are never final; only when Exchange of Contracts happen do offers become final. If you lose out after a property goes to best and final offer stage, you can always submit a revised offer! And legally, the estate agent must pass any future offers to the seller, even if you have won the best and final offer process.
Therefore, even if you win best and final offer, another prospective buyer could submit a knock-out offer and the seller decides to go with that instead. There is nothing legally to stop someone making a revised offer, and the seller accepting that better offer. However, many sellers operate with a moral code and will not accept any offers afterwards – although you will often find if the offer is a few thousand pounds more or if the new offer has a very strong buying situation (eg no chain), rationally a seller should renegade on their best and final offer decision and go with the new revised offer.
Third myth – sellers must choose one of the offers. They have absolutely no obligation, legally, to accept one of the offers put forwards. Unlike an auction where the seller must accept the winning bid, there is no such obligation. In fact, we have seen situations where a seller rejects all the best and final offers, even those that are above their asking price, and then tells all prospective buyers the highest offer and invites everyone to submit new offers above that highest offer! This a best and final offer strategy many unscrupulous sellers do to flush out as high an offer as possible from novice First Time Buyers.
Fourth myth – you cannot change your offer after it is accepted. As there is nothing legally binding to your offer, you withdraw or change your offer at any time after best and final offer, until Exchange of Contracts take place. Do not feel pressured to stick to your original offer, or not withdraw from the buying process, if you find anything unexpected during your due diligence or your situation changes. Unlike a property auction, there is nothing legally binding to finalise exchange of contracts.
As you can see, how to win a best and final offer process is not easy, as the rules are made up and the outcome is not legally binding! However, when there is an attractive property with lots of buyers, and it is your preferred property, you will have to go along with the process to stand any chance of securing it.
Best and Final Offer Tactics: How to Win
The stakes are high when a property goes to best and final offer stage. As you can see from the Myths Debunked section above, the best and final offer process is very much rigged in favour of the sellers, as a tactic to squeeze a higher price. As a First Time Buyer, it is natural to feel panic and pressure, and overpay. But with our simple strategy and list of tactics below, you can equip yourself to navigate best and final offers successfully.
Best and Final Offer Tactic #1: Improve your buying strength, and make sure you communicate it in your offer. If you have not already sorted your agreement in principle before viewing, try to get it now. When you submit your offer, include details of any strong selling points – high deposit amount, stable job, low borrowing multiples, AIP in place, conveyancer selected, chain free, etc. Sellers do value a credible, strong situation when considering offers, as they also want a successful sale.
Best and Final Offer Tactic #2: Suss out from the estate agents how strong the competition is, and what the seller’s expectations. Ask how many other buyers will be submitting bids. Ask about current and historic bids, what has already been rejected. For example, if the seller has already rejected several bids at asking price, you can be sure that there will be other bids above asking in best and final offer. The strategy here is to have more intel than your competition, so you can submit a bid that stands a good chance of winning, but not overpay.
Best and Final Offer Tactic #3: If you think you have a super strong situation, you can simply take control of the situation and decline to participate in best and final offer. Tell the agent you will submit your offer a few days after best and final offer, because unless the process is legally binding and run transparently, it is too much in favour of the seller, and you refuse to participate. Never forget that as a First Time Buyer, your chain-free status can be a strong position of negotiation.
Best and Final Offer Letter Template
If you do decide to put forward a best and final offer for a UK property, you might wonder if there is a specific letter template or email template you should use. As this is not a legally binding process, there is no fixed template or wording you need to use – it is just the same as putting forward any offer.
As with all offers on UK property, you should first discuss it verbally with the estate agent, making sure you also explain your buying situation and your financial and position strengths. Follow that phone call up with a written offer via email.
The email template or letter template you should use should include the following:
- Your offer price
- How many of you are buying (ie husband and wife, partners, single)
- If you have an AIP, mention it (but no need to disclose exact amount)
- If you have a mortgage secured already (eg from a failed purchase) mention this
- Your chain free situation
- If you have a conveyancer on standby, ready to instruct
- Your expectations on exchange date
- Your demand that if your offer is accepted, that the online listing is removed and no further viewings
- Your demand that no further offers from other best and final bidders is entertained
- Any other requirements and expectations that you need the seller to fulfil by X date (eg provide property information, white goods to be included, etc)
By using the above best and final offer letter template, you play up the strengths of your position, as well as set your clear expectations as a buyer.
Frequently Asked Questions (FAQs) about UK Best and Final Offers
Are Best and Final Offers Legally Binding?
No, contrary to popular belief, best and final offers are not legally binding in the UK. They are unlike UK property auctions, where there is a commercial contractual agreement. Sellers do not have to choose the best offer, or any of the offers for that matter. Other bidders can continue to submit offers after best and final offer stage. The winning bid has no obligation to exchange contracts and can pull out or renegotiate at any time.
The Best and final offer tactic is used by sellers and estate agents when they are in a position of strength, with multiple prospective buyers interested, to pressure buyers to offer higher bids than they normally would. Therefore, as a First Time Buyer, you should read the section above on tactics to win best and final offer to help you win at best and final offer.
Can you counter a best and final offer?
Absolutely. As best and final offer is not legally binding in the UK, you can submit your own bid anytime, even after a best and final offer is chosen by the seller. In the UK, estate agents are legally obligated to pass on any offers to the seller, as long as it takes place before exchange of contracts.
However, many sellers do have a good level of ethics and morality, and having run the process, will usually honour their side of the negotiation by sticking to the offer they have chosen, even if a better offer arises afterwards. But… you can bet that if the new offer is substantially higher, or in a better position to proceed, why would a seller not logically change their mind?
What does best and final offer mean UK?
Best and final offer is not defined legally in the UK, but generally means a process where all prospective buyers are invited to submit a bid, by a deadline. The seller will then consider all the offers in one go and make a decision to chose one of them. In reality though, as we discuss in our Best and Final Offer Myths Debunked section, the meaning of best and final offers is whatever the estate agent and the seller defines it, as it is a strategy for them to squeeze a higher bid than they would normally get through the normal offer process.
To recap: best and final offers in the UK is not legally binding, the best or highest bid may not be chosen, it may not be the final round of offers, and there is no guarantee an offer will even be chosen.