With demand for properties increasing in recent months*, sellers are looking for ways to maximise their property value and to seek out serious and able buyers.
‘Sealed bidding’ is a method often used by people wishing to sell a property where high levels of interest are either anticipated or already being achieved, in order to sift out the time-wasters and find buyers that are committed and willing to exchange quickly at the best price.
Jan Hÿtch, President of the NAEA, said: “Sealed bids are often used when interest in a property is high, and it is likely that more than one party could and would wish to purchase. The confidential nature of the process can also mean that homes can go for more than the seller anticipated. However, for first time buyers or those that are unfamiliar with the sealed bids process, the whole situation may be daunting because of its semi-secretive nature.
“There are a few inside tips though that can we can suggest to support those considering buying by this process. Buyers often think that if the property goes to sealed bids the highest bidder will win, but inviting bids doesn’t mean the highest offer always secures the property. The process involves assessing all the information available to find the buyer that has demonstrated the strongest and most reassuring ability to proceed and complete a sale without any trouble. In order to have the best chance of succeeding in this situation, buyers will need to be well prepared in advance with their finances and paperwork all in order.”
The National Association of Estate Agents (NAEA) offers the following advice on how to approach a sealed bid situation:
For the best chance of being successful in your bid you need to be open about your situation and ability to purchase, and present your offer demonstrating your commitment and ability to exchange quickly. Your bid will not only be considered on the amount of the bid, but on how likely it is that you will complete without any problems.
Including a list of things that you already have in place such as a reputable solicitor or conveyancer, a mortgage in principle letter from your lender, and a surveyor on standby, will all demonstrate how serious you are in securing the property. This can make your bid more attractive, even if it isn’t the highest.
Avoid round numbers
To avoid ending up making the same bid as someone else, try using unusual numbers like £200,103 instead of £200,000. This can sometimes make the difference between a successful bid and a tied situation which will delay the sales process further.
Ask for information
It makes sense to get as much information as possible from the agent in order to assess how likely it is that your bid will be successful. Agents may not be able to discuss the other bids but they can give an indication of how many bidders there are and even the strength of other bidders. If you don’t ask you don’t get, so don’t be frightened to ask.
Don’t get carried away
Only bid the amount you can afford and are comfortable paying for the property, rather than the price you think you will need to pay to secure the property. Offering a price you cannot afford will only result in a sale that is unlikely to go through, or one that you might regret.
Don’t miss the deadline
Remember not to miss the bid deadline, but equally it is important not to submit your bid too early. Best advice is to submit your offer just before the deadline and deliver the offer in person. If this isn’t possible, always confirm with the agent that the offer has been received.
If the property has gone the way of sealed bid, it has probably received a lot of attention from buyers. This also means that the seller will have a lot of offers to review and consider. This may take a few days; so don’t worry if you haven’t heard anything the same or next day.
* From the NAEA’s October 2013 Market Report: http://www.naea.co.uk/property-guides/property-market-reports/