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Me and one other buyer have been asked to make our best and final offers on a house after us both making initial offers.

I believe I am in a good position as stated here and I will reiterate this to the estate agent when I make my offer.

I have read that offering an odd amount such as £100,123 would be better than £100,000 just to outbid anyone else making an offer of £100,000.

Are there any other tips for making a best and final offer other than the two I have already mentioned?

Update: I should have probably mentioned that the estate agent told me the initial offer made by the other party. This offer was around £1500 higher than my initial offer (<1% of the property price higher) so seemed insignificant in the scheme of things but I now think this might be a ploy to scare me into making a ridiculous offer.

Second Update: Further to this the estate agent gave a deadline of approximately 24 hours after I was initially told that a best and final offer was to be made - presumably this is to force me into a rash decision of making the aforementioned ridiculous offer.

Jsk
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    "This offer was around £1500 higher than my initial offer and <1% of the property price " Do you mean it exceeded your offer by less than 1% of the property price? – Acccumulation Jul 28 '20 at 00:49
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    Did you mean you and one other buyer? Because I don't think you can both make offers to sell the same house. –  Jul 28 '20 at 02:15
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    @Jsk, one point - £1500 IS NOT insignificant in the scheme of things. They will jump oin an offer higher by £100. – Fattie Jul 28 '20 at 11:45
  • "Or that other potential buyers shouldn't be informed about the offer. " You can't meaningfully do that one in the UK, @Polygorial – Fattie Jul 28 '20 at 11:46
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    Your assessment of the amounts involved seems a little self-contradictory. The 1500 pounds is an "insignificant" amount of <1% of the purchase price, but you seem convinced that to offer more would be "ridiculous". – Nuclear Hoagie Jul 28 '20 at 12:31
  • @NuclearWang by a "ridiculous" offer I was talking 5-10% higher than the asking price. – Jsk Jul 28 '20 at 12:35
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    May I plead with everyone. If you don’t have experience or knowledge specifically of the UK (actually England & Wales) property market, do not answer or comment. Your experience is not relevant, because the market works very differently from what you’re used to. – Mike Scott Jul 28 '20 at 18:20
  • @Fattie "£1500 IS NOT insignificant in the scheme of things." - But it may not even be real. The OP's assessment that the estate agent is trying to pressure them into making a higher offer is probably correct. The seller's agent isn't on the buyer's side. – aroth Jul 29 '20 at 04:10
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    Whenever I've asked an agent about what others have offered they've always refused - are they allowed to give this info? – Mr_Thyroid Jul 29 '20 at 13:16
  • @Mr_Thyroid I thought the exact same which is why I thought it was strange when the told me the 'other offer'. – Jsk Jul 29 '20 at 15:17
  • I wonder whatever happened with this, @Jsk ! Cheers! – Fattie Feb 25 '21 at 00:19
  • @Fattie I upped my initial offer by £1550, a price I was still comfortable with, and got my offer accepted. I am now in the house after completing the transaction and happy with my purchase! – Jsk Feb 25 '21 at 08:48
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    Hooray! @Jsk ... – Fattie Feb 25 '21 at 11:00

4 Answers4

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Personally I would send back this note:

"Thanks, we have already made an offer. Feel free to come back to us if you have a counter-offer in the future. For now we are persuing other properties.

Note that the situation suggested by the agent/seller is unbelievably bad on your end (and for the other buyer).

  1. They are under no obligation, whatsoever

  2. They are giving out zero information

It is simply a fishing trip by them.

Be aware that, as soon as both of you put in a "final" offer, let's say 110 and 115. The agent will simply write back to you saying:

Thanks for your offer of 115. At this time 120 could secure the property.

You would be taking part in a borderline scam!

Be aware that "final offer" means nothing, and gives no advantage to you!.

They will simply look at these new offers and then think, "oh these are interesting, I wonder what we can get".

There is no benefit, whatsoever, to you (or the other buyer).

Property negotiations in the UK are gritty; you have to be pretty aggressive / clear thinking.

Important! What does the phrase 'final offer' mean?

In negotiations you often use phrases in English such as

  • "It's my best offer!"
  • "I swear this is my limit!"
  • "I can't go any higher than X!"
  • "This would have to be our final offer!"
  • "This is a whole-budget offer!"
  • "This is a walk-away offer."

All of this is just colorful language. When you say something like "best!", "final!", "highest!" etc, there is no specific meaning.

(There is, utterly no actual legal or accounting meaning. But there is not even any "meaning" in language - it's simply "colorful language".)

Some folks have commented that the Seller may or may not be "honest". Fortunately (so to speak), that is not the issue...

When the Seller says "Send in your final offer!" it's just colorful language meaning:

  • "Send in more offers!"

There is no meaning if you add adjectives such as final, last, best, most powerful, decisive, aggressive, high, etc.

  • It could be that people not familiar w/ the UK market are thinking of an actual legal mechanisms, perhaps an "auction" or "dutch Auction", "sealed Auction", "tender" or whatever.

This has no connection to any of that.

When the agent happened to say send in more 'final' offers, it is just colorful language, it has no meaning, mechanism, effect - it means literally nothing. It's just like saying enthusiastically "Send in more offers - really good ones! Let's do it!"

That "deadline" thing...

"Further to this the estate agent gave a deadline of approximately 24 hours..."

Just ignore anything an agent says about "deadlines". Do what you want in your own time.

Certainly, at any split second you can lose out on buying a house, for numerous reasons. That works both ways. Any "deadlines" mentioned by anyone are fatuous.

Fattie
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  • I should have probably mentioned in my original question that the agent 'told me' what the other party had offered however the amount was small <1% of the offer or around £1500 therefore I did not consider it worth mentioning. However from your answer it now seems this could just be a ploy to get me to offer considerably more. I will add this to my original answer. – Jsk Jul 27 '20 at 15:18
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    What's to stop OP from sending in another offer, and then if the seller does play further games, withdraw at that point? OP could resubmit their existing offer, raise it by £1501, or any other number of choices. What they have to gain is that if the seller is just trying (rationally) to maximize their sale price, but are ethical and mean what they say, OP may get the house they want at a price they are willing to pay. – stannius Jul 28 '20 at 00:02
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    @stannius The problem is that the “further games” may happen after the buyer has spent irrecoverable money on a mortgage application or a survey or searches. Gazumping is pretty common in a fast-moving market, and you don’t really want to buy from someone whose showing signs that they might indulge in it. – Mike Scott Jul 28 '20 at 07:26
  • I don't see any indication that the seller is behaving unethically or is playing any games, they're just trying to maximize their profit. I don't see what's "laughable" about the deadline - they can choose to ignore it and not buy the house, sure, but putting in a higher offer a month from now isn't likely to go well. "Do what you want in your own time" is great advice if you have no intention of actually buying the house. – Nuclear Hoagie Jul 28 '20 at 13:14
  • @NuclearWang - there are literally no deadlines in UK real estate. You can be gazumped unto the last moment. – Fattie Jul 28 '20 at 13:19
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    I have a close family member who is a real estate agent. The statement in this answer that asking for a "best and final offer" is a trick is simply not correct. "A best and final offer" means exactly what it says... the seller will consider those offers and pick one. Remember, this is just one deal for the real estate agent, and the agent only gets a small fraction of the price. Screwing people over to get just a bit more money on one deal doesn't make sense. That agent is going to be dealing with other agents over and over again. – DaveG Jul 28 '20 at 13:36
  • @MikeScott if the seller agrees to the buyer's offer, aren't they legally obligated to honor that agreement? – Kat Jul 28 '20 at 16:20
  • @Kat - If the offer and acceptance are in writing, generally yes, there is a legal obligation to honor it. But if the offer and/or the acceptance are verbal, they are, in most jurisdictions, not binding. – Doug Deden Jul 28 '20 at 16:46
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    @Kat No, not at all. All offers in England & Wales are made “subject to contract”, which means they depend on both parties being able to agree on the contract of sale. Either can withdraw at any time before that happens. – Mike Scott Jul 28 '20 at 16:55
  • @DougDeden But not in England & Wales, which is the jurisdiction we’re talking about here. – Mike Scott Jul 28 '20 at 16:57
  • @MikeScott So the offer/acceptance could be in writing, but contains a "subject to contract" clause, and that's the clause that allows them to withdraw? It's probably splitting hairs, but then isn't the reason they withdraw based on language in the offer/acceptance that explicitly allows them to do so? So we're still dealing with a "verbal is not binding; written is binding" situation. – Doug Deden Jul 28 '20 at 17:04
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    @DougDeden No, an offer made in writing that doesn’t specify it will still be assumed by the law to be subject to contract. No offer is ever binding until contracts have been exchanged. How much experience do you actually have of the English & Welsh house-buying system? I’ve worked in the industry for twenty years. – Mike Scott Jul 28 '20 at 17:12
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    @MikeScott None. And that's why I'm trying to learn. I certainly didn't mean it to come across as challenging your assertions. I'm just trying to combine what I know of contract law in the US with what I've read about written vs. oral contracts in the UK, and what I'm learning in this Q&A. Thanks for the additional info. – Doug Deden Jul 28 '20 at 18:34
  • @DougDeden - it's just mindbogglingly different in the UK – Fattie Jul 29 '20 at 00:30
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    IME, "Best and Final Offers" is not unusual in the UK, and while it doesn't prevent "Gazumping", nobody I know has had an experience where the seller entertains further offers.Often the reason for doing this process is the seller wants to get on with it and not have a drawn out bidding process. – CMaster Jul 29 '20 at 09:13
  • @CMaster hmm, I'm surprised you've had that experience. (1) in general the UK is commonly known as being "gazump crazy", it's just a feature of real estate there. everyone has a "wild gazumping story" far beyond the "final offers" stage, usually at the "I was about to sign my name but the agent was on the phone w/ someone else" sort of stage!!!! (2) as I mention above, FWIW certainly personally every r/e transaction I have been involved in (FWIW) in the UK featured gazumping far - beyond - the - rofl - final - offers stage! – Fattie Jul 29 '20 at 12:18
  • @DougDeden - when you mention "but contains a "subject to contract" clause" my guess is you're thinking about the say Australian experience? (In Aus. there is kind of a backdoor where you can somewhat sneakily get out of a deal in many situations.) It's just nothing like that in the UK; you have zero obligation until the last split second. There is no need at all for any backdoors or tricks. The funny word "gazump" expresses the situation where you're trying to rush to sign the bloody contract and a few other people out-offer you. – Fattie Jul 29 '20 at 12:27
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    If the USA, a buyer can give a higher offer, but then during escrow find new problems during the inspection contingency with the house and tell the seller they need to give back to the buyer money for the new issues, otherwise the buyer will withdraw the offer. Many buyers play this game and offer a highest bid already knowing they are not willing to actually pay that amount. A problem can always be found so it is zero risk to the buyer to do this. – Julius Seizure Jul 29 '20 at 19:18
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The question comes in how much do you like the house? If you like it, and can see yourself living there for the next 25 years you may consider writing a letter to the owners about how you see yourself living in the home. This would might include raising children, and decorating ideas. There are some cases, that I read about, where lower bids win because of such a letter. This may not work if you are dealing with institutional ownership of the property, but can work if you can make a human connection.

Another thing to play in your favor is the financial position you are in. I would include that with any letter you write. While you won't win against a cash buyer, you may win against someone with 10% down and a slightly higher bid.

In your agent's estimation how serious are they about best and final? You may put in a bid with the understanding that you can go a bit higher. They may come back to you with, "well if you can go 1,888 higher the house is yours".

If this house is not perfect that do not feel obligated to go max price. There will be other homes that come up for sale.

My Update: If you really believe that the agent and seller is being this dishonest you'd probably do best by walking away. However, in general, I would temper my editorial comments. The seller wants two things that can be competing interest. The first is a quick smooth sale, the second as much money as possible. They probably have an eye on their new house and they may also be up against competing offers. If they can get 3K more for their house, then they can up their offer for the new house as well.

This kind of thing is not unheard when housing is in high demand. Currently the low mortgage rates is increasing demand.

Pete B.
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  • The real estate agent who handled the sale of my current apartment said that everything else being equal he would like to sell to me because he liked my attitude :) Sounds like a bad salesman trick, but it was on a sellers market where real estate agents had little reason to butter up customers. – Philipp Jul 27 '20 at 15:55
  • @Philipp Having a good attitude does speak volumes in business dealings and can help one greatly. Good work. – Pete B. Jul 27 '20 at 16:28
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    This is nice in theory, but it ignores the fact that in the UK the agents will probably have made it very clear to the sellers to ignore anything that does not come from the agents themselves. Going behind the agent's back is a high risk strategy for the seller, even if the potential buyer is honest and genuine (and many are neither, of course). – alephzero Jul 27 '20 at 21:39
  • If I were to sell my house through an agent, and someone who viewed sent me a feelsy letter, I would be disinclined to accept any offer they proffered. You raising kids in a house doesn't make it worth less to me, and it's insulting to me for you to think as such. – Adam Barnes Jul 27 '20 at 22:08
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    Anecdote warning: The "writing a letter" trick does work in some cases, especially when the owner has a strong emotional connection to the home. We won the sale on our first home over 11 other buyers because we wrote a letter, and we were not the highest offer. The owner had built the house 65 years prior and lived in it ever since. After we moved in, the neighbors told us how much the letter had impacted him because he connected with some of our personal details. Be genuine, and not over-the-top, but know your audience. – Dan A. Jul 28 '20 at 00:57
  • hi @PeteB. As I mention in a comment above. You truly muddy the waters by saying "... seller being dishonest ... ". There is utterly no dishonesty involved. In any way. The Buyer is simply saying "Oh. I want everyone to send in more offers." That's it. There is utterly no promise to do anything with the offers, to consider or not consider other offers, to sell or keep the property or anything else. – Fattie Jul 28 '20 at 09:22
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    There seems to be some vast confusion about the phrase final offer. It's literally identical to "my best offer!" or "a really good offer!" No "final" offer is "final", that is meaningless. Virtually every time I've ever made anyone a "final!" offer or "best!" offer I've made another one, and ditto in the other direction. there is huge confusion in this question. Nobody is being dishonest. – Fattie Jul 28 '20 at 09:23
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    You keep saying that nobody is being dishonest, now putting it in bold. However this is presumably on the assumption that there really is another offer. There are plenty of stories of how the mysterious other bidder pulled out once the bidder telling the story declined to increase their bid yet again. It doesn't matter whether this idea of a final offer is meaningless or not, telling someone this will be their final offer when you know that isn't true is dishonest. If I were to give any advice it would be that estate agents cannot be trusted and this phraseology cannot be trusted either. – Eric Nolan Jul 28 '20 at 09:55
  • @EricNolan ah, don't get me wrong. Almost certainly there is no other offer. Let me explain clearly: (1) the agent is a filthy cheating scumbag. (2) all agents in the UK are filthy cheating scumbags. (3) the entire process of all real estate transactions in the UK is a hive of villainy and evil. But the phrase "final offer" simply means nothing. it is not an assertion of .. anything. it's literally just like saying "give me a good offer". there's no way the agent (or anyone) could be lying about the phrase "final offer!" it's just a colorful phrase designed to trick people. – Fattie Jul 28 '20 at 11:53
  • All I can say on this matter is that in the US competing offers are common. – Pete B. Jul 28 '20 at 11:55
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    @Fattie the seller is saying "we have multiple offers, so if you're lowballing, now's your chance to up your bid to potentially beat the other guy". No one is claiming calling it a "best and final" offer legally obligates them to anything. Whether it's in the buyer's best interest to send an offer for the highest amount they're willing to pay or not depends a lot on whether the competing offer really exists; there's what people are saying could be a lie. – Kat Jul 28 '20 at 16:28
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If you haven't already, consider making an offer with an escalation clause. Basically, you say, for example: "I'm offering $100,000 and I'm willing to beat any other legitimate offer by $1,000, up to a maximum of $120,000."

Cody
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    I regret that I have only one upvote to give, as this is unquestionably the best way to proceed. You might want to add that you should specify in your offer that the seller's agent has to show your agent the signed offer they are basing the escalation on. It was part of the boilerplate in the contract form the last time I bought, but it's always good to check. – Nobody Jul 28 '20 at 02:01
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    Another thing you might consider adding is that it's worth asking the seller's agent if any contract terms besides price are important to the seller. Sometimes making a concession on some other matter can give you a leg up on other buyers who might be willing to offer a bit more. – Nobody Jul 28 '20 at 02:33
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    You’ll end up paying exactly $120,000. Never, ever, tell the other party what your upper limit is, because if you do so then that’s what it will cost you. – Mike Scott Jul 28 '20 at 07:19
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    @Nobody Buyers don’t have agents in the UK (except in rare circumstances, mostly at the very high end of the market). – Mike Scott Jul 28 '20 at 07:20
  • @MikeScott What's the risk here exactly? The seller's agent is going to fraudulently produce an offer? Or just that the buyer doesn't have the constitution to walk away from a skeezy seller after they lied about a best and final offer? – Steve Cox Jul 28 '20 at 14:13
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    @SteveCox All the seller has to do is get a friend or family member to offer $119,000, now they know that you will pay $120,000. The offer can always be withdrawn if you back out and don’t go ahead with the $120,000 price. Or the seller just says “I’ve now decided that $120,000 is the least I will accept”. – Mike Scott Jul 28 '20 at 16:59
  • @SteveCox The problem is you have no way to verify that the estate agent is telling you the truth. "I had a verbal offer of $115 000, can't disclose the client's details - data protection." You can at this point decide they are bluffing and walk away. – richardb Jul 28 '20 at 17:26
  • @MikeScott I bought my house with an offer that included an escalation clause, and paid $40k less than my maximum. It's a pretty common, established practice practice here (Seattle, USA). I don't think seller's agents would be likely to try to fake a competing offer, as they could probably lose their license if caught. – Cody Jul 28 '20 at 17:53
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    @Cody The UK (actually England & Wales) property market works very differently to the US one, and experience is not transferable at all. – Mike Scott Jul 28 '20 at 18:15
  • @MikeScott yeah that's fraud, and they can lose their license if they do that. If the seller says "I've now decided that $120,00 is the least they will accept" then they've broken their word on the "best and final offer" and graciously informed you that they would be a terrible counterparty through the rest of the home buying process and just saved you a month of headaches – Steve Cox Jul 28 '20 at 18:15
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    @SteveCox You don’t actually have any experience or knowledge of the UK property market, do you? Estate agents in the UK aren’t licensed, just for example. (OK, technically there’s a negative licensing regime, but it doesn’t inform their actions or decisions.) – Mike Scott Jul 28 '20 at 18:17
  • @MikeScott Only in passing and i guess it might not actually be fraud to produce a fake offer in the UK (I would just check with my real estate attorney). – Steve Cox Jul 28 '20 at 18:26
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The previous answers ignore the way estate agents operate in the UK. Of course this answer assumes the agents are reputable and honest - otherwise all bets are off on what might happen.

First, having appointed an agent, the seller has agreed that ALL communication with potential buyers is carried out through the agent. If a buyer tries to make direct contact, either they will be politely told to to contact the agent, or ignored. It is a high risk strategy for the seller to attempt to go behind the agent's back. The agent may simply terminate the relationship, and will probably warn all other agents in the area not to do business with them, should the seller's private attempt to find a buyer falls through.

Second, the "last and final offer" is normally a legally binding procedure: the seller and the highest offerer are both required to accept this as the basis for the sale, in exactly the same way that the final bid in an auction is legally binding on both parties.

So refusing to submit a final offer is simply walking away from the sale. The agent may assume that the potential buyer doesn't understand the rules of the game and ask whether they really want to resubmit their previous offer, but the agent isn't under any obligation to do that.

The entire purpose of the "last and final offer" is to put an end to a series of offers, counter-offers, re-negotiatons of exactly what is being sold, etc and bring the process to a conclusion. Unless somebody is being dishonest, there is no way to game the process: the highest offer wins, and the selling process is terminated.

alephzero
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    Is a "best and final offer" legally binding? How is it different to making a normal offer on a house? When making a normal offer you are not legally bound immediately however you are at the exchange of contracts stage of the house buying process. – Jsk Jul 27 '20 at 22:50
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    I agree with @Jsk. If the seller is required to accept the highest offer, then that must be a quirk of your jurisdiction. It is definitely not true in Virginia (for example), and in fact it's a good idea to ask the seller's agent if there are any contract terms besides price that are important to them. Sometimes a matter that you as a buyer find inconsequential can be important enough to the seller to tip the balance in your favor. – Nobody Jul 28 '20 at 02:31
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    Nothing is legally binding until contracts have been exchanged, which will happen months after a “last and final offer” is made and accepted. – Mike Scott Jul 28 '20 at 07:18
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    An estate agency contract doesn’t require that all contact goes through that agent. It simply requires that the agent gets their commission if the house is sold to a buyer they’ve introduced (if a sole agency contract) or else if it’s sold at all during the contract period (if a sole selling rights contract). – Mike Scott Jul 28 '20 at 07:24
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    @Jsk The question has a UK tag, US jurisdiction does not apply. – Marianne013 Jul 28 '20 at 11:48
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    Do you have a citation for the seller being legally obligated to accept the highest offer? Another answer claims the opposite. – Kat Jul 28 '20 at 16:30
  • @Kat there is no such obligation. Other factors such as chain lengths can be important to a seller and can influence who they sell to regardless of offer price. – Jontia Jul 28 '20 at 18:30
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    After searching for any UK law to back up the claims in this answer, I have only found UK sources that claim the opposite. Nothing is binding until exchange of contracts. – user2357112 Jul 29 '20 at 04:24
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    Nothing is binding until contracts are exchanged. This answer is dangerously wrong. There’s also no obligation to accept the highest offer - or any offer. Until contracts are exchanged, any party can withdraw from the sale. – Tim Jul 29 '20 at 11:08