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What are the best ways for home buyers in NYC to approach a best and final auction for a property listing? What are some best and final offer tactics for buyers in NYC that everyone uses? Should you submit an offer at the last minute so your offer doesn't get shopped? Or should you submit an offer early just to make sure it gets in?
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Some of the stuff I've read online for this topic is barely readable. I really hope Hauseit comes out with an article on this soon as this is a question I come across a lot. Here's my brief take on it.
In NYC real estate, a best and final is a potential buyer’s last and highest offer, typically submitted before a deadline given to all interested parties. A best and final offer is usually submitted when the owner has the great situation of a bidding war. When an owner has received multiple offers from interested parties, an owner may ask for a best and final as a way to manage all of the interested parties. The owner essentially asks for all interested parties to submit their final, best, and most favorable terms to the owner. At which point the owner will select a winner, much like a traditional auction.
So what should you include in your best and final? Well, you should consider more than just price. While price is ultimately the most important factor, you should also consider adjusting some of the non priced related terms of your offer such as any contingencies, exclusions/inclusions, closing date requests etc. If you make your offer easier to digest, you will have a better shot of winning the best and final. You can also include a home buyer offer letter if you haven't already, maybe a heartfelt letter will save the day!
So how does the owner decide who wins the best and final? Once all offers for the best and final auction have been received, the owner and listing agent will review everything. The listing agent and owner will factor in certainty of close, price and any contingencies or concessions. If you're getting a buyer agent commission rebate, it's important to work with a full service, brand name broker who doesn't openly discount. If you don't and the seller and listing agent knows you're getting a rebate, this will obviously get factored in and will hurt your chances. Not only will the benefit of the rebate be nullified because the seller knows that some of the commission is simply going to you the buyer, both the seller and listing agent will be resentful. Much better to get a discreet rebate through a company like Hauseit (who operates this great forum by the way). This process of best and final offer selection may take a few days, and when the owner has decided, the listing agent will reach out to everyone to let them know of the outcome.
Can I find out what the winning bid was? Usually not. If you lost, there's no requirement for the listing agent to disclose information of any sort. However, rather than simply waiting for the sale price to be recorded in ACRIS, you can usually find some idea of where the property traded by simply asking nicely. If you're not a discount broker, the listing broker will usually be nice enough to give you some color on where the winning bid went for. If however you're some shady mom and pop rebate broker trying to dish out rebates, the listing broker won't give you a second look.
Can I improve on my offer after a best and final concludes? It depends. Some listing agents and sellers will want to be straight shooters and go with whomever submitted the best offer before the deadline. Others will be more greasy and will give color to bidders in the hopes of a bidding war even after the conclusion of the auction. So yes, there's a chance that you can submit a higher offer to the seller after you find out that you didn't win the best and final, and yes the listing agent is compelled to submit that offer to the seller. However, there's a real chance that the seller will not accept any such improvement and will honor the best and final results. It's up to you whether you want to roll the dice! -
Best and final offer tactics for buyers in NYC can be quite tricky. There's no exact right approach and you'll have to feel out the situation. For example, will the seller really honor the deadline or will the seller accept revised bids even past the deadline?
Has anyone tried submitting a bid for a best and final offer process with an escalation clause?
"Escalation Clause: The offer price of $2,050,000 includes an escalation clause, which increases the purchase price offered to be $10,000 greater than any competing offer up to a maximum offer price of $2,125,000. Please note that the terms of the escalation are consistent with the clause provided for in the REBNY Offer Form."
(below)
Purchase Price Offered in an amount equal to $2.05 million; provided that, in the event seller receives a bona fide third-party offer on the Property prior to the execution of a definitive contract with the Buyers and in an amount (net of any seller adjustments or credits) equal to or greater than the Purchase Price Offered (the "Competing Offer"), then such Purchase Price Offered shall be increased to an amount equal to the Competing Offer plus $5,000 and subject to cap of $2.105 million (this clause, the "Escalation Clause"). The Buyers must be provided with satisfactory documentation of any Competing Offer.Comment
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An escalation is an intriguing and infrequently used yet intelligent strategy. The only practical issue is: how can you confirm that the listing agents have received another 'bona fide third-party offer'? I'm not sure that your average listing agent will ever agree to share such information. The market isn't that transparent.Originally posted by aslan View PostComment
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