How to win at sealed bids – 12 tips

18 Sep How to win at sealed bids – 12 tips

Sealed Bids are back!

Vendors are experiencing an unprecedented level of demand in the London property market.

Part of the reason for this is the disproportionate level of demand for property, inflated by interest from overseas investors.

When a decent property comes to the market and is priced vaguely sensibly, more often than not there is a queue of buyers, and vendors are beginning to take advantage of this, attempting to maximise the selling price by going to sealed bids.

In short, sealed bids are part of a concealed auction in which each of the interested parties submits their best and final price to the estate agent by the deadline given. These are then considered by the vendor and one buyer is selected to move forward with the property purchase.

This process, while ultimately deemed to be the fairest way of finding the best bid or bidder within a prescribed timeframe, is essentially a lottery for the parties concerned. They need to decide what they are prepared to pay for the property, which by this stage is normally above the quoted asking price, guess at what level the other parties are going to pitch and choose whether to pay a possibly inflated amount in order to have a chance of winning the process.

However, when it comes to sealed bids, it is not always the case that the property is sold to those who submitted the highest offer. In cases where the bids have been close, we have found that the vendor will not necessarily favour the highest bidder, but instead will often prefer the bidder who looks most likely to proceed to exchange and onto completion.

In this instance, a carefully planned and worded offer letter is paramount in maximising ones chances of being selected, and proven representation from a professional further increases the success rate.

Mortgages For Auction Bids, Top Tips To Help:

1. Give as much information about your circumstances alongside your bid price. Especially how proceedable you are and how fast you can move.
2. Tell your personal story. Kids at the local school, lived in the area for 10 years, just had a baby. Try and attain some emotional buy in.
3. Chain free – a huge positive
4. Mortgage AIP in place – with a copy supplied.
5. Solicitor lined up – choose a proper one. Explain to the Solicitor what you are up to – ask for their feedback on timescales and pass this information on. Have a look at their CV for similar and recent Sealed Bids and fast exchanges.
6. Deposit funds are available – with proof and detail.
7. Make sure your finances are in order. Speak to a mortgage broker and double check your maximum borrowing, maximum purchase price and the affordability of the monthly repayments. Pass details along.
8. Only bid what you want to pay. Marry in haste and regret at leisure and all that…
9. Make your bid price a quirky number. Instead of bidding a flat £985,000, put in a figure of £985,176. There difference is minimal but is gives a strong impression you have thought through your bid price carefully and are serious with your offer. It makes it stand out. Maybe that £176 is enough!
10. Put all of this in a coherent, concise written proposal
11. Always remember your bid price is not a contractual agreement. Re-negotiation by either party is permitted after the offer is accepted. If the lenders valuation or your surveyors report throws up a potential issue, go back with a revised purchase price. But this can go against you too – so get on and exchange!
12. Exchange as fast as possible.