Best-and-final invites the top two or three lenders to revise specific terms in a final, simultaneous response. Typical protocol: written invitation listing the specific lines to revise (rate, IO, recourse , prepay), 48-to-72-hour response window, simultaneous award decision, and explicit message that no further rounds will be run. Avoid open-ended back-and-forth.
How to request final lender proposals
When to call best-and-final: when the top two or three LOIs are within 25 bps on rate and within meaningful structural distance, and when there are still concrete improvements to extract on at least one or two lines. If the top LOI is clearly the winner on every dimension, skip the round and go to award.
What to ask for: specific lines, not open-ended improvements. For example, request the rate to come in by 10 bps, request the IO term to extend by one year, request the exit fee to drop by 25 bps. Open-ended (improve your offer) signals the borrower has not done the comparison work and weakens negotiating leverage.
Timing: 48 to 72 hours is the working window. Lenders need time to take the revised request to credit; the borrower needs the rounds to converge before the deal goes stale.
Process integrity: the message must be that this is the final round. Lenders that have offered their genuine best on round one and are then asked for a second-best-and-final lose trust in the process and may pull pricing on subsequent deals. Run one best-and-final, then award.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) · Board of Governors of the Federal Reserve System · 2026-Q1