So here’s the
scenario, there is a popular property on a sought after road and there has been
lots of interest generated and as a result an open house has been arranged. There
have been lots of offers coming in and the owner is advised to use the process
of a sealed bid, however, offers related to a property do not generally come
with a loving kiss!
Sealed bids
are a useful tool to be used at times when demand significantly exceeds supply,
especially when it is that ‘special’ property.
Agents don’t only use sealed bids for high value properties,
it’s a method of sale used in all price brackets. However, in my view it’s an outdated system one
where it should be more formalised, restructured and transparent. If you have been fortunate or unfortunate
enough to be in the sealed bids group its a little “cloak and dagger” and your
fate is decided by strangers. Nevertheless,
buyers should have to prove in advance of making their bid (primarily sellers are most concerned with
this aspect of the transaction), how ‘proceedable’ are the buyers, for example,
is the sale going through to completion.
So here’s the
scenario, there is a popular property on a sought after road and there has been
lots of interest generated and as a result an open house has been arranged. There
have been lots of offers coming in and the owner is advised to use the process
of a sealed bid, however, offers related to a property do not generally come
with a loving kiss!
Sealed bids
are a useful tool to be used at times when demand significantly exceeds supply,
especially when it is that ‘special’ property.
Agents don’t only use sealed bids for high value properties,
it’s a method of sale used in all price brackets. However, in my view it’s an outdated system one
where it should be more formalised, restructured and transparent. If you have been fortunate or unfortunate
enough to be in the sealed bids group its a little “cloak and dagger” and your
fate is decided by strangers. Nevertheless,
buyers should have to prove in advance of making their bid (primarily sellers are most concerned with
this aspect of the transaction), how ‘proceedable’ are the buyers, for example,
is the sale going through to completion.
Preparing
for the ‘sealed bid’ process
From the
conception of looking at properties and going to view that special one we
dreamed about, can feel like an emotional rollercoaster, perhaps we envisage
sitting at the kitchen table reaping the benefits of all our hard work but the
reality is quite a long way from that picture. To get the ball rolling it’s probably best
to get the vendor to accept an offer before it goes down the sealed bids
process. That’s why it is essential to have all the relevant
information ready.
However here
are some thoughts about how to navigate through the sealed bids process.
·
In
my own experience we, (my wife and I) acted quickly and found out from the
agent as much as we could about the seller.
We met with the vendor as we did not want to become a number on the
piece of paper. One of the vendors
criteria for selling the property was for a family to move in. This is where he raised his family and this was
an important factor for him to pass on a family home in a family orientated area. Subsequently, the crux of the story was we
were prepared to wait (quite a long time) this was crucial in the process of
buying the property. All these factors
have to be kept in mind so preliminary investigations are crucial.
·
Submitting the highest bid won’t necessarily
secure the property for the eager purchaser. The prospective buyer is asked to submit their ‘best and
final’ bid in writing, all offers are considered by the vendor and agent, with
all the information gathered, a decision is then made.But, at this stage
because it is not a legally binding decision on either parties, seller or buyer
if someone else comes along with a bigger wallet then it’s all change. If
you require a mortgage, provide a copy of your ‘agreement in principle’ - if you have a property to sell provide the
status of the sale or if you are buying the property in cash, then proof of the
funds will greatly help.
·
Offering
an unusual number means that no one else will be offering the same amount and
it shows that you have given this matter much thought. Try not to get caught up in the romance of it
all and offering above what you can afford is not viable, offering the highest
you feel most comfortable with is the most feasible, after all the highest bid
doesn’t necessarily secure the deal.
Fundamentally, we know that buying a home is the biggest financial
purchase of our lives and we have to get it right. It’s human nature to be emotionally involved
and hopefully reading some of the tips above will help prepare you if you find
yourself in such a situation.
Guidelines
for vendors:
·
How soon can they move? Do the
buyers timings fit with yours and are they prepared to wait if there is a delay
in selling for whatever reason.
·
Consider all the offers on the table. While the aim is to achieve the best possible
price think about is this the best buyer for your position.
·
What deposit are your buyers offering? If they have a large deposit then securing a
mortgage will be easier.
·
Are they chain free? how flexible are they?
·
Have they appointed a solicitor?
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If you are looking for an agent with experience that can help you find the right tenant for your property, then contact me to find out how we can get the best out of your investment property. Email me on chris@ashmoreresidential.com or give me a call on 020 8366 9777.
If you are looking for an agent with experience that can help you find the right tenant for your property, then contact me to find out how we can get the best out of your investment property. Email me on chris@ashmoreresidential.com or give me a call on 020 8366 9777.
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