Sealed Bid worry(20 Posts)
Dear all, this is my first post on here, and it is a bit long, sorry! I am hoping for some advice, please?
The house we have fallen in love with is going to sealed bids next week....Apparently we are one of 6 interested buyers who will be bidding. I have a gut feeling about the estate agent not being trustworthy (probably something to do with the fact that when we were looking for an agent to sell through they valued our house £175,000 under what we are now selling it for! It was only on the market for 3 weeks before we found our buyer btw) Our buyer does not have anything to sell, so although we are in a chain, it is extremely short and strong. We won't need a mortgage and we will be offering a considerable amount over the 'guide price'. My biggest concern is that the owners have told us they are leaving it totally up to the agent and won't even be present when the bids are opened. What if the estate agent has a 'favoured' buyer - eg friend or someone prepared to bung them some cash on the side? Do you think it is reasonable for us to give a copy of our bid to the sellers direct?
What have you got to lose? I would give the sellers a letter, explain what the house means to you etc, plus benefits of cash buyer and chain etc.
It'll go to whoever offers the highest price. But you could knock on their door and explain your position?
Thanks, I guess I just have a bad feeling that the agent is on the fiddle....I really hope that it will just go to the highest bidder in the strongest position...I think we will def. give the vendors a copy of the bid. They will then be able to work it out if the agent is pushing for someone else due to an ulterior motive. Sad to not trust the EA, but we have heard of bids being 'lost' on purpose etc...
Our house went to sealed bids and the agent opened them - that's normal. But then of course they rang us and talked them through and the decision was ultimately up to us. They actually didn't urge us to go for the highest bid, but the one with the biggest deposit - if there had been someone like you who didn't need a mortgage I'm sure they'd have advised taking that. Although in the end we went for the people offering the most money because we needed every penny to trade up.
We did have a couple of people come to our door in an attempt to put their bid in to us personally. They were lovely and we were sad not to choose them because they wanted the house so much, but their bid wasn't as high as some of the others. So I think you've got nothing to lose by putting a note through their door saying you love the house and explaining your financial position if that's what you do. Ultimately it will come down to the strongest bid and they may agree that the mortgage-free thing trumps a higher offer or they may just go for the top offer. Good luck though!
Can you ask to be present when the bids are opened? Not the done thing I'm sure but it might give you peace of mind.
Also, it would be incredibly immoral and unethical for the estate agents to have a preferred bidder prior to the bids being opened. Surely, their preferred bidder should be the highest bidder.
I think it's important from a negotiation perspective that you don't come across as desperate.
Let the sealed bid process go through, and get the agent to tell you the result.
There is so much that isn't in your control, I really wouldn't overthink it all. If your financial position and your sale is right for the vendor then they'll want to deal with you.
Asking to be present at the envelope opening just makes you appear desperate IMO.
We sold a flat by sealed bids some years ago. The agents handled the bidding process, but no way would we have left the final decision to them.
We did go for the highest price, but sometimes you might go for a slightly lower price if the finance is already sorted.
I think the OP's concern is that the EA will not present the OP's real bid to the seller, but present his 'friend' as the highest bidder in return for cash under the table to the EA.
If this is the case, a note with your bid to the sellers will alert them to this if the 'highest' bid offered by the EA is lower than the OP.
Sad to not trust the EA
Sad or not, I'd definitely approach the vendors with details of your offer/position ... unfortunately I've learned from bitter experience that automatically trusting an estate agent would be naive in the extreme
My last house went to seal bids, well over the asking price. I stupidly DIDNT take the highest offer, but chose a "lovely couple" who had kids and apparently loved the house. Who then strung us along for 2 months, and suddenly pulled out.
We eventually sold it for £50k less than the original highest offer. Still rankles.
I used to be an agent. They will 100% pick the highest offer - it means more commission.
In a sealed bid situation I always advised my buyers to go to the very top of their budget and add a couple of quid. A few times that random £17 made the difference.
And there were never any cash under the table dodgy dealings.
Glad to hear it, Amber - if only all agents had the same principles
It's true that a higher sales price = more commission, but IME that can't always compete with a nice little deal stitched up between an agent and their developer pal, who'll aim for a knockdown price then split the post-renovation profit ...
You have to hold your nerve. Did you meet the vendors? I reckon that can seal the deal sometimes.
We did sealed bids for a house and lost. I walk past it nearly every day now from the house we bought instead. I'm very glad we have our house, I loved the other one but ultimately it wasn't right.
Good luck - hope you get what you want
Average estate agency fee is c2%. On £10,000 that is £200. So pick a bid that is £20k lower than the highest for a £500 bribe makes sense. To halve the difference (ie £10k bribe) makes more money than the fee on £500k house. No brainer for some EA
I've benefited from an EA's 'preferential' behaviour. No bribes involved but they chose a route that helped to protect their commission on multiple sales.
So if the EA gets an offer of 1k less than yours but the purchasers house is marketed by them, they'd be in line for double commission. They can present that as a good offer which they are in control of potentially the majority of the chain.
I'd cc your offer to the vendors just to keep the EA on the ball
Amber you worked for a crap agent then.
The agent I worked for would put forward all the offers, and recommend the best offer for the vendor, normally the one in the best position, small chain, big deposit etc, not necessarily just the highest offer.
If you call the leading agency in London and the highest-earning sales office crap, then yeah
Of course we would put all that to the vendor, but if it was a situation like the OP's where the agent made the call and there was no fatal flaw in the chain then of course the sale price would be the deciding factor. Sigh.
So pick a bid that is £20k lower than the highest for a £500 bribe makes sense
Only a £500 bribe? In the world of property development I believe the "incentives" can be rather more than that
In my own case the valuer let it drop that a builder the EA "often worked with" was interested. Later, when he turned out to be a shark, they tried to deny the connection and insisted I'd got confused with a ... err, umm ... whispering in the background ... Mr Smith. Clearly frustrated at their own lack of imagination, they got quite shirty when I blew them out
Oh and Amber, I obviously can't comment on an unknown EA, but IME high earnings don't necessarily translate to good service for the client. It seems to me there's a reason for the appalling reputation of too many in this very poorly regulated industry ...
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