A best and last offer is exactly what it sounds like: the highest price a prospective buyer is prepared to pay for a certain house. Sellers may want best and final offers for a variety of reasons, but one typical scenario is when many buyers are competing for the same house.
Let’s look at what a best and last offer is, when you should make one, and whether it’s a good option for you.
Definition of Best and Final Offers
In high-demand conditions, such as a seller’s market, a single property may get numerous offer. Rather than negotiating with each buyer individually, the seller’s real estate agent may request the best and final offer from each interested party. This request is usually made with a few days’ notice to provide purchasers time to examine their choices before the deadline for submitting offer.
The phrase contains two separate terms, each with a specific meaning:
- Best: Includes a number of criteria over which the buyer has control, such as the price, conditions, financing, and closing dates.
- Last: This is the buyer’s final offer; once it is accepted, there will be no more negotiations for this property.
A buyer’s best and last offer is their last chance to bid on a property. They will need to utilize their finest home buying negotiation abilities to offer themselves the best chance of getting picked. To make their offer stand out, they may want to explore going beyond the asking price or reducing additional barriers to closing, such as removing conditions.
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How Best and Final Offers Work
Consider an example of a best and last offer from both the buyer and seller’s viewpoints.
Considerations for Homebuyers
Assume you and your partner want to buy a house in Brampton. Your real estate agent has located the ideal property for you. It is advertised less than 24 hours ago and is priced below market value. You make an offer as soon as possible, but the next day, your agent calls to inform you that it is a multi-offer scenario. The seller’s agent has requested that all bids be submitted within the next three business days.
You made your first offer contingent on the sale of your existing house, but you’ve decided to remove this condition to make your offer more competitive. You’ve also consulted with your agent and decided to make an offer that is far more than the asking price in the hopes that your offer will be the highest. Your agent presents the offer after much consideration. All you have to do now is wait.
Considerations for Sellers
Now consider the seller’s point of view. Because it is a hot market, your home received four offers within 24 hours of being listed. Your real estate agent recommends requesting best and final offers, and by the deadline, you’ve received follow-up offers from all four parties.
Several factors must be considered before deciding which offer to accept. All-cash deals might be appealing since they provide guaranteed funding and can close faster. Offers with no stipulations, such as needing a home inspection or selling another property, might also be tempting.
Is a Best and Final Offer Worth It?
This is a difficult topic to answer because it is totally dependent on your circumstances. If you have any wiggle space in your initial offer, you may decide it’s worthwhile to raise the price or alter your contingencies. You can also choose to resubmit your initial offer as your best and last offer.
When it comes down to how much you’re willing to negotiate, ask yourself these questions:
- Do I have the ability to pay more?
- How badly do I want this property?
- Are there other available homes without multiple-offer scenarios?
- What contingencies am I willing to drop to appear more competitive?
Once you answer these questions, you’ll be able to decide whether submitting a best and final offer is worth it for you.
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