So, you view a practice and like it – in fact like it so much you want it. You put in an offer (along with many others such is the market). All going to plan so far.
As there are multiple offers made you are invited to place a ‘sealed bid’. A sealed bid is your best and final offer and considered to be the fairest and most ethical way to achieve the best price for a practice. An auction, where each buyer is told the highest bid through to the deadline, in my experience, leads to offers being made from the heart (rather than the head) and at some point through the purchase process the buyer then looks to re-negotiate after the dawning realisation that they may have overpaid.
Your invitation to make your ‘best and final offer’ is critical. The words to focus on here are ‘best’ and ‘final’ – this is your last chance to secure this practice. Sadly, I have lost count how many times I have heard variations of things like:
‘If I’d have known another £3,000 would have secured it, I would have paid it.’
‘I could have paid a bit more.’
‘I should have paid an extra £8,000 as this was the practice of my dreams.’
The list goes on, but in all these cases the prospective buyer put in what they thought was their best offer, but not a winning offer. Of course there is the fine balance between paying just enough and missing out – no one wants to pay more than they need to. However, if you have found the practice of your dreams and it requires you to put in a winning offer to secure it then this needs to be done BEFORE the deadline for offers. After, is too late.
From talking to buyers who have been bold and made winning offers, they take the view that the additional amount paid factored in over the period they will own the practice is a price worth paying.
There is no right or wrong, it’s about what is right for you. However, next time you are in a position where you have the potential to secure the practice of your dreams do three things.
- Take a breath
- Ask yourself – is this the special practice that warrants a winning offer
Good luck in finding the practice of your dreams.