You’d be amazed how many people think that they can negotiate but it’s an art and in reality not everyone can – especially when they have found something they have fallen in love with.
This year we have had lots of clients who have been invited to participate in an informal tender or to submit ‘Best & Final’ offers for houses they have seen. Some agents seem to be closing every sale this way but whilst great for the seller it’s a lousy way to buy a home. Not only is it hard to work out what to pay the winning bit can end up paying way more than the second placed bidder.
On three occasions this month we have politely declined to take part in a Best & Finals suggesting to the selling agent that we’d prefer to close the negotiations via a Dutch Auction or suggesting an private auction via Zoom or FaceTime. On each occasion we managed to negotiate a deal that the sellers were happy with but that was below what our clients would have bid had they been forced to take part.
Agents have to have a strong hand to demand an informal tender. On the most recent occasions we knew there were only two buyers so if we didn’t play they were left with just one bidder. Whilst there is always a risk there is nothing to stop a buyer making an offer outside of the process just after the deadline that has been set. The agent is legally obliged to submit the offer even if it didn’t come in the prescribed manner.
I’m often asked how to approach a Best & Finals. My advice is to break the job down into two distinct competitions. The first is to win the bidding process. If you can win that they you get a chance to review the property and decide if you want to buy it. If you fail to win the bidding then it’s very hard to push back in afterwards and try and get a deal. Someone usually ends up crying in such circumstance whereas if you win but subsequently regret it then you can always renegotiate or ultimately withdraw.
Bid what you are prepared to lose the house for and then add a pound. If someone offers more then they either love the property more than you or they have deeper pockets! It’s not much compensation but trust me, it’s easier to live with the loss if you put your best foot forward even if it turns out not to be enough.
Remember, avoid getting sucked into a tender if you can but if you can’t then don’t try and bag a bargain