Best and final is the second, and usually last, round of competitive bidding for a commercial real estate property. After the initial call for offers, the seller shortlists 2 to 4 top bidders and invites them to submit their highest price and strongest terms in a compressed window. It is the last chance to win the deal.
What Is Best and Final in Commercial Real Estate?
Best and final in commercial real estate is the second round of competitive bidding, where the seller invites 2 to 4 top bidders from the call for offers to submit final price and terms. Per PropRise, it narrows a wide field, sometimes 10 to 30 first-round bidders, down to the serious contenders with real underwriting capability.
The round is fast and specific. Where the first round takes LOI-level general terms, best and final demands near-contract precision: a firm number, proof of funds, financing detail, and often larger earnest money that goes hard sooner. Per PropRise, the response window compresses to 3 to 7 business days because the seller has already vetted these buyers.
Dimension | Call for offers (round 1) | Best and final (round 2) |
Number of bidders | 10 to 30 or more | 2 to 4 |
Response window | 10 to 21 days | 3 to 7 days |
Price specificity | Range or initial offer | Final, specific number |
Terms detail | General LOI structure | Near-PSA specificity |
Earnest money | Standard, around 1% | Often increased, may go hard sooner |
Expected from buyer | Interest and high-level terms | Proof of funds, financing, track record |
Per PropRise, three bidders is the most common count: enough competition to drive pricing, but few enough that each believes it can win.
Why Best and Final Matters
Best and final matters because it is where a seller extracts the true ceiling, and where a buyer's price alone rarely wins. Per PropRise, certainty of close is the most frequently cited non-price factor in seller decisions. A buyer offering 3% less with hard money and a 21-day due diligence period routinely beats the highest bidder carrying soft deposits.
Speed compounds the pressure. With a 3 to 7 day window, the buyer who already built a full underwriting model in round one can spend the time refining assumptions and sharpening terms. PropRise cites JLL research that the time from best and final invitation to submission has shortened over the past five years, with some markets now expecting responses within 48 hours on highly competitive deals.
The quotable point: at best and final the highest price is worthless if the buyer cannot close, so the round is won on certainty, hard earnest money, a compressed due diligence period, proof of funds, and a clean track record, as much as on the number itself.
Example
A seller runs a best and final round on a $20,000,000 asset with three shortlisted bidders. Bidder A leads on price. Bidder B is lower but removes closing risk entirely. The seller scores each on price and certainty of close.
Term | Bidder A | Bidder B |
Purchase price | $20,600,000 | $20,000,000 |
Earnest money | 1%, soft through DD | 3%, hard at PSA |
Financing | Financing contingency | All cash, proof of funds |
Due diligence period | 60 days | 21 days |
Closing timeline | 75 days | 30 days |
Bidder B's price is $600,000 below Bidder A, a gap of about 2.9% ($600,000 divided by $20,600,000). Per PropRise, a buyer offering roughly 3% less with hard money, no financing contingency, and a 21-day due diligence period routinely wins over the higher soft-money bid. Bidder B's earnest money is 3% of $20,000,000, or $600,000, hard at signing, which offsets the price gap with certainty. The seller takes Bidder B.
Variations and Edge Cases
A best and final round is not guaranteed, and it does not always end the negotiation. Sellers skip it when one first-round offer clearly dominates, keep the runner-up as a backup, or negotiate minor terms with the winner afterward. The table covers the variants a buyer should expect, including the cases where the round is skipped entirely.
Variant | How it behaves |
Skipped best and final | A dominant first-round offer, 5% or more above the next bid, wins outright |
Skipped for certainty | A clean first-round offer with hard money is awarded to avoid losing the buyer |
Backup buyer | The runner-up is kept on standby if the winner fails to execute the PSA |
Minor post-round terms | Sellers may negotiate small terms with the winner before the PSA |
48-hour window | Highly competitive deals compress the response to about two days |
Per PropRise, the most common mistake at best and final is assuming price alone wins. Others include bidding beyond your own underwriting, which invites a retrade, submitting late in an already short window, and omitting a track record when the seller most wants proof the buyer can close.
Best and Final vs Call for Offers
Best and final is often confused with the call for offers, and both are competitive rounds, but they sit at opposite ends of one process. Call for offers is the wide first round where all buyers submit initial offers. Best and final is the narrow second round where the seller invites 2 to 4 finalists to submit their highest price.
Per PropRise, call for offers runs 10 to 21 days and accepts range-level LOIs, while best and final compresses to 3 to 7 days and requires a final number, proof of funds, and near-contract terms. The first round finds the contenders; the second round makes them show their ceiling under a tight clock.
Frequently Asked Questions
What does "best and final" mean in commercial real estate?Best and final is the second, and typically last, round of competitive bidding for a commercial real estate property. After the initial call for offers, the seller and their broker select a shortlist of 2 to 4 top bidders and invite them to submit their highest price and strongest terms. It is the seller's way of extracting maximum value by creating direct competition among the most serious buyers.
How many bidders typically make it to best and final?Per PropRise, sellers typically invite 2 to 4 bidders to the best and final round. Inviting too many reduces the competitive pressure on each bidder, while inviting too few risks losing leverage if one drops out. Three is the most common number: enough competition to drive pricing, but few enough that each bidder believes it has a realistic chance of winning.
What do sellers look for in best and final beyond price?Beyond price, sellers evaluate certainty of close, speed to closing, earnest money structure, due diligence period length, financing contingencies, track record, and the buyer's reputation for not retrading. Per PropRise, a buyer offering less but with hard money and no financing contingency can win over the highest bidder carrying soft money and a long due diligence period.
How long do you have to respond to a best and final request?Per PropRise, best and final response windows are compressed, typically 3 to 7 business days, and some highly competitive markets expect responses within 48 hours. The seller has already vetted these buyers in the first round, so the expectation is that a bidder can sharpen its terms quickly. Having an underwriting model already built from round one is essential.
Related Terms
Call for Offers
Offering Memorandum
Letter of Intent
Due Diligence
Deal Pipeline