DEFINITION of 'Best And Final Offer'
1. In real estate, a prospective buyer's last and highest offer. A best and final offer is typically submitted in response to a bidding war. A seller who has received several offers will ask either all bidders or the top bidders to submit their best and final offers. This type of offer presents the most favorable terms the buyer is willing to offer the seller for the purchase of the property. In some multiple offer situations, the seller will request that potential buyers submit only one offer that is their best and final offer.
2. In government contracting, a vendor's response to a contracting officer's request that vendors submit their last and most attractive bids to secure a contract for a particular project. Best and final offers are submitted during the final round of negotiations.
BREAKING DOWN 'Best And Final Offer'
1. In addition to increasing the purchase price, in a best and final offer, a prospective buyer may shorten or lengthen the time to close, ask for fewer seller concessions and/or waive contingencies for a home inspection or financing approval. Buyers will make these changes in an attempt to be the most competitive bidder and get the home under contract.
2. A company's best and final offer for a government contract will be its lowest-priced offer with the most favorable terms. By asking for a best and final offer, a government agency may be able to secure a contract at a lower price.