Facebook
Twitter
YouTube

Sealed bids - expert advice for buyers

Tuesday 26th November 2013

How should you approach a sealed bid situation? A new buyer’s guide to sealed bids has been compiled in response to the recent increase in the number of property deals going to sealed bids.   

The National Association of Estate Agents (NAEA) has published its first ever guidance about how sealed bids work and how to boost your chances of beating other buyers in response to a sharp rise in the number purchasers being asked to submit ‘sealed bids’ in recent months.

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. But the private nature of the process can also mean that some properties can go for more than the seller anticipated. What’s more, for some of those that are unfamiliar with the sealed bids process, the whole situation may be rather daunting.

Jan Hÿtch, President of the NAEA, said: “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 NAEA’s advice on how to approach a sealed bid situation, suggests that buyers should aim to sell themselves, avoid round numbers, to always ask for information, to refrain from getting carried away, to not miss a bidding deadline, and ultimately to be patient in waiting for a reply after making a sealed bid.

The NAEA offers the following top tips on how to approach a sealed bid situation:

Sell yourself

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.

Be patient

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.

              

comments powered by Disqus
Premium Articles
Sign up
Live Chat