'Best & Final' negotiations are more and more common and buyers need to be prepared to handle the situation when it comes up.
(If you prefer to listen, not read, watch my video instead)
This type of sale is often triggered before an auction when an acceptable offer has been received and the property will be sold i.e. it’s on the market.
Buyers should confirm the agent’s process and timeline so it’s clear when offers will no longer be accepted.
The ‘best’ part of Best & Final refers to the combination of the terms and price within the offer.
The ‘final’ part means just that: Final.
There’s no going back so buyers must put their best foot forward.
This is a very daunting situation for buyers as it’s a very effective method agent’s use to squeeze every last dollar out of buyers.
Buyer’s hate the stress of an auction, but at least at auction you have transparency on each bid and you know how much more you’ve paid to secure the property.
We all hate the prospect of showing all our cards.
Even worse, the fear that we might pay substantially beyond the nearest competition.
But in this situation you have no choice as the property will be sold.
The only way to feel confident on the fair market value is to have all your pre-purchase diligence in order (contract review, building and pest inspection and council planning diligence) so you know exactly what it is you’re buying and a thorough analysis of the market and recent comparable sales.
This information will support your maximum price that you’ll include in your offer.
That is, the price at which, at $1 more you’d be happy to see the property go to someone else.
Not forgetting the terms part of the ‘Best’ in Best & Final, buyers should find out all they can about the vendor’s situation.
Terms that will sweeten the deal for them can be the difference between having your offer accepted above another.
For example, if a long settlement is preferred by the seller and you’re in a position to offer one, then incorporate that.
Conversely if the property is vacant, then a short settlement could be more attractive.
Asking the right questions will help you understand the levers that can be pulled.
Finally, include as few conditions as possible with your offer, keeping in mind there will be buyers whose offers are unconditional and a vendor will factor that in when comparing offers.
If you’ve done the above and still end up missing out because another buyer was prepared to pay beyond your maximum price or offer terms that you couldn’t, then you know you gave it your best shot.
Good luck out there!
Narelle
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