You have found a property you like, made an offer and then receive a call from the selling agent:
“We have multiple interested buyers. Please submit your best and final offer.”
For Sydney property buyers, this can quickly create pressure.
You may start wondering:
- How many other offers are there?
- Is someone actually above me?
- How much should I increase my offer?
- Will another $5,000 or $10,000 secure the property?
- Should I simply give the agent my absolute maximum?
- What happens if I refuse to increase?
A best and final offer should not be treated as an invitation to keep bidding against yourself.
Before changing your offer, you need to understand the property, the comparable sales, your maximum price and the terms you are prepared to accept.
What Does “Best and Final Offer” Mean?
A “best and final offer” usually means the selling agent is asking interested buyers to submit the strongest offer they are prepared to make.
It is commonly used when there are multiple interested buyers or when the vendor wants to bring negotiations to a decision.
It does not necessarily mean there will be no further negotiation.
In NSW, a property is generally not secured simply because a vendor has verbally accepted an offer. Before contracts are exchanged, the vendor may continue negotiating with other buyers and may ultimately sell to someone else.
That is one reason buyers need to separate the excitement of having an offer “accepted” from actually securing the property.
Does the Agent Have to Tell You the Other Offers?
Do not assume the selling agent will tell you exactly what another buyer has offered.
You may be told:
“Another buyer is higher.”
“We have several strong offers.”
“The vendor wants everyone’s best and final.”
That does not automatically tell you what the property is worth or what you should offer.
The selling agent represents the vendor, not you as the buyer. Their role is to act for the seller in the transaction.
Your offer therefore needs to be based on your own assessment of the property rather than simply reacting to what the selling agent tells you.
Step 1: Work Out What the Property Is Worth to You
Before increasing your offer, review the evidence.
Look at genuinely comparable recent sales, including:
- similar property type
- land or internal size
- number of bedrooms and bathrooms
- parking
- condition and renovations
- street and exact location
- school catchments where relevant
- strata features for apartments
- views, aspect and floor level
- development or planning considerations
- other factors that may materially affect value
A nearby sale is not automatically a good comparable.
A renovated house on a superior street may not be a reliable comparison for an unrenovated property on a busier road.
The same applies to apartments. Two units in the same suburb can sell very differently depending on the building, floor level, outlook, parking, strata condition and layout.
NSW underquoting requirements also recognise comparable sales and property characteristics as relevant evidence when agents determine estimated selling prices.
Step 2: Set Your Maximum Before the Pressure Builds
One of the most important things a buyer can do is establish a maximum price before entering the final stage of negotiation.
Your maximum should reflect:
Property value
What does the available evidence suggest?
Your financial position
What can you comfortably afford?
Finance considerations
Could a lender value the property differently from the price you agree to pay?
Your alternatives
Are there other suitable properties available?
Your personal circumstances
How important is this particular property compared with other options?
Your maximum should not simply become:
“Whatever it takes to beat the other buyer.”
That is how emotion can turn a sensible purchase into an expensive one.
Step 3: Do Not Automatically Increase Your Offer
Being asked for a best and final offer does not mean you have to increase.
Imagine you offered:
$1,100,000
and you believe the property is reasonably worth between approximately $1.08 million and $1.11 million based on the available evidence.
If the agent asks for your best and final offer, increasing immediately to $1.15 million simply because another buyer exists may not make sense.
Your existing offer may already be your best offer.
You can tell the agent that your current offer stands.
Sometimes the correct negotiation move is not moving at all.
Step 4: Consider the Terms, Not Just the Price
Price is important, but it is not always the only consideration for a vendor.
Depending on the circumstances, an offer may also involve:
- proposed settlement period
- deposit arrangements
- finance status
- timing of exchange
- contract amendments
- cooling-off arrangements
- inclusions or exclusions
- other conditions
You should have the contract reviewed by your solicitor or licensed conveyancer before committing to legal terms. NSW Government guidance recommends obtaining the sale contract early and having it examined before proceeding.
Do not waive legal protections merely because you believe it will make your offer more attractive without first receiving appropriate legal advice.
Step 5: Put Your Offer in Writing
Where practical, submit your offer in writing.
This creates a clear record of:
- the price offered
- any conditions
- proposed settlement
- deposit arrangements
- expiry or timing of the offer, where applicable
NSW Government guidance notes that putting an offer in writing can help buyers keep track of negotiations.
You can also ask the agent to confirm that your offer has been presented to the vendor.
What If the Agent Says Another Buyer Is Higher?
You have several choices.
Increase your offer
If the property still represents acceptable value and you have room within your predetermined maximum, increasing may be reasonable.
Hold your position
If you believe your offer already reflects fair value, you can leave it where it is.
Change your terms
Depending on the vendor’s priorities, there may be circumstances where settlement timing or other acceptable terms strengthen an offer without increasing the price.
Walk away
This option is often underestimated.
If securing the property requires you to substantially exceed what the evidence supports or what you are comfortable paying, walking away may be the better financial decision.
There will be another property.
There may not be another opportunity to recover money unnecessarily paid because of an emotional negotiation.
Can the Vendor Accept a Lower Offer?
Yes.
A vendor does not necessarily have to accept the highest offer.
NSW Government guidance notes that vendors may accept a lower offer from another prospective purchaser and generally are not compelled to sell to a particular buyer before exchange.
For example, a seller may prefer an offer with terms that suit their circumstances better.
This is why the strongest offer is not always simply the largest number.
What Happens After the Vendor Accepts Your Offer?
Do not assume the property is secured.
Until contracts are exchanged, another buyer may still make an offer and the vendor may decide to proceed with them instead. This is commonly referred to as gazumping.
If your offer is accepted, speak with your conveyancer or solicitor promptly about:
- contract review
- exchange
- cooling-off arrangements
- deposit requirements
- outstanding due diligence
- building and pest inspections where relevant
- strata investigations where relevant
Your mortgage broker or lender should also be kept informed where finance is required.
A Common Mistake: Negotiating Against Yourself
Suppose you offer:
$950,000
The agent responds:
“We need your best and final.”
You immediately increase to:
$970,000
But you do not actually know whether another buyer offered $951,000, $965,000 or anything above your original offer.
You may have just increased your own purchase price by $20,000 without knowing whether it was necessary.
That does not mean you should never increase your offer.
It means every increase should have a reason.
Ask yourself:
What new information has changed my assessment?
If there is no new information other than pressure, think carefully before moving.
How a Buyer’s Agent Can Help During Multiple-Offer Negotiations
A buyer’s agent represents the purchaser rather than the vendor.
When there are competing offers, buyer representation may include:
- analysing recent comparable sales
- assessing the property against available market evidence
- identifying factors that may affect value or resale
- helping establish a disciplined maximum price
- communicating directly with the selling agent
- developing an offer and negotiation strategy
- coordinating with your solicitor, conveyancer or mortgage broker
- helping remove emotion from the decision
- advising when continuing to compete may no longer make sense
The objective should not be to win every property.
The objective is to buy the right property at a price and on terms you are comfortable accepting.
Sometimes securing the property is the right outcome.
Sometimes walking away is the better deal.
Already Found a Sydney Property?
If you have found a property and are unsure how to approach the negotiation, or you want professional representation throughout your Sydney property search, Truth Group can assist.
Work directly with Nicholas Parpis throughout the buying process, including property assessment, comparable-sales analysis, due diligence coordination, negotiation and auction support depending on the service you engage.
Explore Sydney Buyer’s Agent Services
Full-service residential buyer representation starts from $9,500 + GST for purchases up to $1.5 million.
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This article provides general information only and does not constitute legal, financial or property advice specific to your circumstances. Contract terms, cooling-off rights and other legal matters should be discussed with a qualified solicitor or licensed conveyancer before you proceed.
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