If an agent is asking for BAFOs then it is because they are expecting high demand for a property and may already have generated several offers early on in the marketing.
In the current property market climate of ‘high demand and low supply’ many properties are being offered for sale asking for ‘Best and Final Offers’ (BAFOs!) over a ‘Guide Price’ by a closing date and time.
In fact, I would probably say that every single house we have sold over the last year up to £500,000 has gone to BAFOs.
Best and Final Offers – what does it mean?
If an agent is asking for BAFOs then it is because they are expecting high demand for a property and may already have generated several offers early on in the marketing. It then becomes easier to allow all viewings to take place over a short period of time before considering any offers. All offers are then received at the same time by which time bidders would have time to consider their ‘Best and Final Offer’.
Note – Agents will be expecting offers to be over the headline Guide Price – if you are thinking of offering less then you probably won’t get the house.
What is the process?
This is as much for sellers as it is for buyers, If an agent is planning properly for BAFOs then the following steps will take place.
1) All the marketing material for the property must be prepared ahead of launching the property. The market reacts immediately to New Instructions being uploaded to Rightmove and the other property portals so if you don’t have everything in place – photos, floorplan, description and a Walk Through Video which Watersons exclusively provide – buyers will switch off. You only get one chance to make a first impression so it has to be perfect. The more people that like the look of a property the more people will view it.
2) A smart agent will hold off starting viewings for a week. The last thing we want is an offer on a property on day two of marketing before we have exposed a property to the whole of the market. If an agent proudly claims ‘Sold in 24 hours’ or ‘Sold to the first viewer ‘ it means they haven’t reached every buyer and have probably undersold the house, Viewings often take place as ‘Open Viewings’ where viewers can turn up without an appointment on a given day normally over a 2 hour period, or at an appointed time on a ‘Block Viewing’ where viewings take place back to back on one or more days. In both situations viewings are likely to be over a weekend.
3) Depending on the initial response viewings may continue for about a week following the first round of viewings. This allows for viewers who couldn’t make the Open or Block viewings but also allows for 2nd viewings, viewings with builders and architects if the property needs work or even viewings with Mum and Dad!
4) By the closing date for the offers, you must place your offer in writing, normally by email, and provide supporting evidence and ‘Proof of Funds’ POF for your offer. This includes financial information. A copy of a Mortgage Agreement in Principal (AIP), confirmation of the amount being borrowed, evidence of cash if you do not need a mortgage – literally bank statements, investment balances, internet banking screenshots etc. If you are selling a house, we need to know all the details. Who is selling it, what the chain is, how advanced the sale is – we will verify this with your selling agent. If you do not provide an agent with all of this information it is likely that you will not be successful. If you do not have you house on the market already or you do not have a buyer you are not likely to be successful. Sometimes a heartfelt letter giving the reasons why the vendor should accept your offer helps, but only if you are a strong buyer at a good price.
5) Once all the offers are in it can take 24/48 hours to verify all offers undertaking necessary due diligence. It can also take time to contact all vendors to seek instructions. But normally an answer is given within 48 hours. Importantly you should remember that this is ‘Best and Final Offers’ – we don’t expect you to increase your offer if it is declined. You’ve had your chance!
6) Once an offer is accepted the normal house buying process commences, instructing solicitors and completing the mortgage and legal process, but don’t delay, if you go too slow the seller may ask the agent to speak to the other bidders and change buyer.
So – How do you win?
Well, unfortunately, there will only be one winner. And it is not always the highest bidder. A lower offer from a cash buyer will be more attractive than a higher offer from a buyer who has not sold their own house yet. But the following will go a long way towards helping you win the bidding on your new home.
1) Providing all of the financial and background information as above is absolutely critical to the decision making process. Withhold information and your offer will be quickly dismissed.
2) Offers can be as high as 5% or even 10% over the Guide Price – or more – so think carefully about how much you really want the house. This will dictate how bullish you are with your bid. If you are not keen enough you probably will not get it and may be better of waiting for the next house that comes along.
3) Most people entering in to BAFOs have already done so once or twice or even more times! Think about how much you offered on other properties of the same type, size and style in the same neighbourhood where you didn’t win and bid by comparing against these houses – then bid a bit more.
4) Try not to think about what other people will bid – just think about how much you can afford and how much you want the house. If it’s the house for you, you will win!
I hope the above helps to guide you towards your dream home. I’m always happy to advise on any specific property for sale with any agent. Contact me directly at firstname.lastname@example.org or 07778 410902
Editors Comments: Sohale.co “News-Online-Anytime” our platform is read by over 32,000 visitors a month, and is the fastest growing Lifestyle Magazine for Hale Village and beyond. Sohale.co #sobrand #so #sohale