Is best and final offers a good idea?

speedmop · 06/10/2024 16:43

you only go to best and final after you’ve had a number of buyers express intention to put in offers!

Nousernamesleftatall · 06/10/2024 16:43

I have only heard it this in a bidding war. Does she have offers on her house?

BubblyTime · 06/10/2024 16:45

In the present market? Terrible idea.

Original poster

caffelattetogo · 06/10/2024 17:04

Yes, I thought the same! I think maybe it's a bit soon, or she should consider an auction if she's in a real hurry.

OP posts:

speedmop · 06/10/2024 17:13

She doesn’t seem to really understand the process

BubblyTime · 06/10/2024 17:35

caffelattetogo · 06/10/2024 16:41

A good friend is looking to sell and wants to go straight to best and final offers. I've only known probate sales like this. Silly question, but what happens if you don't get a suitable offer?

How many offers do they have?

rainingsnoring · 06/10/2024 18:05

If she wants to get several offers and start a bidding war, she needs to market the property for a significantly lower price than others that are on the market. She's much less likely to get multiple offers otherwise; most sellers are finding the market very slow.

speedmop · 06/10/2024 18:23

BubblyTime · 06/10/2024 17:35

How many offers do they have?

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doesn’t look like this “friend” even has it on the market

BubblyTime · 06/10/2024 18:42

rainingsnoring · 06/10/2024 18:05

If she wants to get several offers and start a bidding war, she needs to market the property for a significantly lower price than others that are on the market. She's much less likely to get multiple offers otherwise; most sellers are finding the market very slow.

Good point, use PropertyLog to slightly undercut the asking prices in your area.

Original poster

caffelattetogo · 06/10/2024 18:46

rainingsnoring · 06/10/2024 18:05

If she wants to get several offers and start a bidding war, she needs to market the property for a significantly lower price than others that are on the market. She's much less likely to get multiple offers otherwise; most sellers are finding the market very slow.

Yes, I think that's the plan. It's a desirable area but needs a lot of work doing, so hard to gauge a price as other properties on the same street will be worth a lot more. It is a bungalow on a big plot so possibly buyers will demolish and build a house on the site. I think her plan is to do an open house weekend and then ask for bids, but I have no idea about selling this way.

OP posts:

speedmop · 06/10/2024 18:49

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rainingsnoring · 06/10/2024 19:29

An open weekend could definitely work but only if she prices on the lower side, taking into account the cost and trouble of doing the work, which most sellers seem to be under estimating at present.

BubblyTime · 06/10/2024 21:57

I think accepting that "bidding wars" are from another time, another market would be the best thing for your friend to do in the first instance, if it isn"t priced correctly nowadays there will be no viewings at all let alone competition to buy it.

Twiglets1 · 07/10/2024 06:57

An EA may have advised your friend to do an Open House followed by going to best & final offers if she gets more than one person interested.

That is standard practice but “best & final” won’t work unless she has 2 or more interested buyers.

GasPanic · 07/10/2024 10:09

If you market your house and you get lots of interested parities then to me it makes sense and I assume often happens.

If you receive lots of offers on listing your house it normally means you have underpriced it. So letting the interested parties bid allows you to establish an increased price more in line with what the market is willing to pay.

The downside being that if you do this, then you don't usually get to pick the buyers on other criteria such as how proceedable they are (unless you make that part of the bid criteria), whether they are cash/mortgage or whether they have their own house to sell. In today's market it is not just about offering but being able to proceed as much as anything, as you can see from threads on here there are a lot of people with houses they want to sell but are unable to lower the price.

XVGN · 07/10/2024 11:04

OK, I'm a cynic. But I wouldn't be surprised to find an EA go to Best and Final when they only have one offer on the table - as a method to get the only person offering to increase their bid.

Another2Cats · 07/10/2024 13:27

As others have said, this only works where there are a number of people interested in the property at the asking price.

In the current housing market that likely means that the EA has under priced the house by quite a bit.

As a previous poster said, in this situation, letting the interested parties bid allows you to establish an increased price more in line with what the market is willing to pay.

I'm aware of one property not too far from me where this happened earlier this year. When I saw it on Rightmove I was simply amazed at how low a price they were asking, in fact I was even tempted myself, it was that low.

It then went to best and final offers and I heard that it went for something like 30% more than the asking price (and even that's still relatively cheap).

Either that was a deliberate ploy or the EA really got the pricing wrong. Or perhaps the sellers were just desperate to sell and wanted a quick sale so lowered the price?

Witchlite · 07/10/2024 13:35

We’re doing this - sale by informal tender with a written offer on a set date.

it is a probate sale.
it needs about £150k work - we’ve had a full survey done and made it available to people wanting the house.
it’s a desirable house in a desirable location.
it’s been priced about 15% under market value - very deliberately. We want it sold!

it works well in some circumstances. It may mean we take a hit on the price 🤷‍♀️

GasPanic · 07/10/2024 13:37

Another2Cats · 07/10/2024 13:27

As others have said, this only works where there are a number of people interested in the property at the asking price.

In the current housing market that likely means that the EA has under priced the house by quite a bit.

As a previous poster said, in this situation, letting the interested parties bid allows you to establish an increased price more in line with what the market is willing to pay.

I'm aware of one property not too far from me where this happened earlier this year. When I saw it on Rightmove I was simply amazed at how low a price they were asking, in fact I was even tempted myself, it was that low.

It then went to best and final offers and I heard that it went for something like 30% more than the asking price (and even that's still relatively cheap).

Either that was a deliberate ploy or the EA really got the pricing wrong. Or perhaps the sellers were just desperate to sell and wanted a quick sale so lowered the price?

Edited

To me it's a kind of halfway house between a normal sale and an auction.

You establish the market price but you don't have some of the more onerous terms of an auction, like having to pay up immediately which makes it largely unsuitable for mortgage holders, and you get to proceed with the sale in a more usual way, searches conveyancing, survey etc. The downside compared to auction of course for the seller is that if you need the money quickly the sale may still end up not being proceedable after a relatively long timescale.

speedmop · 07/10/2024 15:47

Witchlite · 07/10/2024 13:35

We’re doing this - sale by informal tender with a written offer on a set date.

it is a probate sale.
it needs about £150k work - we’ve had a full survey done and made it available to people wanting the house.
it’s a desirable house in a desirable location.
it’s been priced about 15% under market value - very deliberately. We want it sold!

it works well in some circumstances. It may mean we take a hit on the price 🤷‍♀️

why so desperate to sell?

Witchlite · 07/10/2024 15:59

speedmop · 07/10/2024 15:47

why so desperate to sell?

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Because we have tax bills to pay and the house is old, needs repairs and will deteriorate if left empty a long time.

we’re not desperate, just don’t want it to take several extra months to get a few extra thousand pounds, which will attract 60% tax (40% plus clawback of £1 for every £2 in allowance)

Musicaltheatremum · 07/10/2024 16:07

This happens in Scotland
You see a property "offers over £x"

People view and if they want to buy you put in a "note of interest" the buyer, once they have more than one offer sets a closing date at which point all the people who have noted interest get asked to put in their offer.

Once the closing date has passed the offers get looked at and you choose the one you want....may not be the highest...my son got his property as he didn't have a place to sell and could move in on the date they wanted.

Saz12 · 07/10/2024 18:27

It's going to have to be a great property to attract several potential buyers in current market! I'm in Scotland, and "best and final" or "closing date" isnt inevitable - if the vendor likes your offer and hasn't any others then they'll just accept it. Usually EA will suggest it once they've had at least 2 offers and a couple of other seriously interested parties.