Caroline Jarvis is a Senior Negotiator based in our Market Harborough office. Born and bred in Leicestershire, she is both familiar and fond of the area she covers and here she talks about the increasing demand for best and final offers.
The property market – as with every other aspect of life – has been greatly impacted by the Covid pandemic. As we emerge from the last 18 months there are some elements of life that will return to how they were, and others will stick and become part of the much-vaunted new normal. The rise of flexible home working and the acceleration of online shopping are two of the elements that are here to stay and spring immediately to mind. The property market, which was heavily impacted certainly in the early days of lockdown, has also seen changes that may well stick for long term.
One of those has been the rise of “best and final offers” as a sensible and fair way to conclude a competitive sale. Despite strongly rising prices, the temptation to push the asking price of a property too far will inevitably discourage potential buyers from viewing and will slow the selling process. However, when properties are well priced, there is always keen interest and lots of viewings. This can lead to healthy competition between buyers to secure a property and if this process is carefully managed it can yield higher price for our clients.
For example, we have recently sold a delightful farmhouse with lovely Georgian features. It was unusual in that it was surrounded by more modern properties, and three years ago we tried to sell for £650,000 and we could not get a single viewer. It just didn’t move at all and it was subsequently withdrawn from the market.
It’s been well publicised that prices have risen by about 10 per cent during Covid, so in May this year, when we reintroduced the same property to the market at £675,000, this felt like a very keen selling price.
We were pleased that the market reacted really well with a number of people keen to buy. We recommended that we should invite best and final offers to conclude the sale. The reaction was incredible. We had an offer on the day it was brought to market, six people bid in total and it sold for well over its asking price, much more that the 10 per cent rise that we have seen in the market at this level.
Best and final offers need to be used carefully. In such a competitive environment, people can push themselves too far and then get cold feet. But when carefully managed, with buyers correctly challenged about their motivation and ability to buy, and only encouraged to make offers that they are completely comfortable with, best and final can work incredibly well.
The seller knows they have achieved the best possible price and the purchasers are treated equally and fairly, knowing that if they missed out, the property sold for a figure that they would not have been comfortable paying.
If you’d like to talk through your home moving plans, please don’t hesitate to get in touch with your local Fisher German agency team. You can find our office network here.