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Original poster

SEALED BID SITUATION! Roughly what % to offer over asking price?!!

38 replies

RanToTheHills · 14/03/2007 08:59

Finally found somewhere to buy and there are 4bids on the table.Been given deadline of Sat to get in a sealed bid. Never been in this situation before and it feels like a lottery with v high stakes! Not sure how to play it.Any agents out there with tips on what to offer, eg on average 10% over asking price gets it etc etc?? Thank youvery much!

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throckenholt · 14/03/2007 09:01

I guess the bottom line is you offer what you are prepared to pay for it - if it is worth that to you and you get it - great - if not then fine - you were not prepared to pay what someone else was.

Original poster
RanToTheHills · 14/03/2007 09:05

you're right, but it's mind-games atm,trying to predict what it's"worth" both to us and others. There's a huge shortage of supply where we live and it's in a great location but is a modernisation project too so hard to pin down true value.

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pesme · 14/03/2007 09:06

if any similar propertis have sold recently find out what they went for. add on a premium of what thehouse is worth to you. don't go crazy!

Original poster
RanToTheHills · 14/03/2007 09:07

nothing on that road sold in past 2 years! I'll check land registry though and try to work it out by adding inflationary/trend increase on most recent sale.

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throckenholt · 14/03/2007 09:11

hmm - work out a budget for the work that needs doing. Look at how much money you have - and decided your maximum - take it from there.

If you can't afford it then you can't afford it - be realistic. Factor in say mortgage interest rises of 5% - could you still afford the repayments ?

throckenholt · 14/03/2007 09:15

don't get stuck into the mind games of second guessing other bidders - it is what it is worth to you that matters.

Earlybird · 14/03/2007 09:17

Is it a house you would plan to be in for a long time, or a 'step on the ladder' sort of house? Have you seen anything else that you like as much? Could you live in it as it is now, or would work need to be done straightaway? How much work/what estimated budget? What do you think the house would be worth once the work is done?

Those are the sorts of questions I'd be asking myself - and I imagine most/all of them have occured to you.

Of course, it should be a financial/investment decision. But, buying a home is an emotional decision too - and that sometimes leads to paying more if you're in a position to do that.

elliott · 14/03/2007 09:19

I agree, decide what it is worth TO YOU and don't go mad. We sold our house recently and had two potential buyers interested, so went for 'highest and final' offers. The best offer was pretty much bang on the asking price, which I was pleased with.
Have you had previous offers turned down or is it a once only bidding process?

Did you see the Phil and Kirsty prog relatively recently where a couple went completely mad and ended up offering £150K more than the next bidder??

Original poster
RanToTheHills · 14/03/2007 09:20

it would be long-term, we could seriously add value to it, we both love its location. We've only seen 1 other property that we like as much in 1year of looking (was taken off the market,unfortunately).
It's reasonably within our budget including building work so in theory we could pay over the odds for it.

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Original poster
RanToTheHills · 14/03/2007 09:22

yes,I saw that, the pooor buggers! They found out by accident, didn't they? Then seemed to have been put off house as had become devalued in their eyes and pulled out!
We have already offered the asking price as did the others (we assume),all rejected.

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WaynettaSlob · 14/03/2007 09:26

I think a lot depends on the area and the situation of the housing market. We were looking at a house last year that was on at 675K. It went to sealed bids. there were 6 offers (we didn't go for it) Three were in the late 600s, two were around the 720 mark, and the winning bid was in the mid-late 700s!!!

I think the key thing is this: how much do you think the house is worth? How much can you afford? Go for your best offer and if it doesn't get it then it isn't meant to be.

Sorry if that wasn't much help

prettybird · 14/03/2007 09:27

I'd agree with Throckenholt - it's what it's worth to you that counts.

Where are you? In Scotland, sealed bids are the normal way of doing things, and normally you get a feel for what the going rate above the asking price is. In Edinburgh it's LOTS, in Glasgow it's quite a lot. In other areas, it might not be much at all.

I'm in Glagow and the house below us was on the market for offers over £350k and I beleive that they were looking for £440k. It got sold without going to closing (ie sealed bids) - but I beleive that they got waht they were asking for - or close to it.

Have you asked the vendors what they are looking for?

But if it is a sealed bid and you have worked aout waht you can afford/want to pay, it is worth adding a tiny bit extra. to make it an unusual sum. I know when we bought our place, which went to closing with two epople interested, that the difference between the bids was, to quote the sller later, "the amount in a wallet". We bid something like £136,611.

Original poster
RanToTheHills · 14/03/2007 09:30

thanks,no not in Scotland (unfortuantely!)in SE England.
It's on at £385k.

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Bramshott · 14/03/2007 09:40

I think when it's sealed bids, you just have to give it your best shot - the maximum you could afford. We bought our house through sealed bids a year ago - was on for £295k and we offered £310k. We were only going to offer £305k, but then the night before, we did the sums again, and thought "well we can just about afford it, and we would so kick ourselves if we didn't get it". For a while we thought, oh God, maybe we've paid over the odds, because you never know what the second highest bid was, and of course it would have been great to have paid less (also a renovation project, so would have been more money for renovations rather than living in chaos still!), but I honestly never think about it now.

elliott · 14/03/2007 09:41

prettybird I don't understand the Scottish system - I mean, if they wanted 440, why didn't they have an asking price of 440 or thereabouts??

RTTH, we are in NE England so not very familiar with the SE market, but for what its worth, our final bids were only about 5% higher than the previous offers. Do you think your buyers were expecting such a lot of interest?
i suppose, based on nothing at all(!), I'd be thinking around 420 might be appropriate in your case (so about 10% over). But I agree that adding a little bit on top to make it not a round figure might be a smart move.

elliott · 14/03/2007 09:42

(I now seem to have killed all the threads I've posted on btw )

Waswondering · 14/03/2007 09:45

This reply has been deleted

Message withdrawn at poster's request.

MrsMills · 14/03/2007 09:45

Grrr, sealed bids make me so angry. What's wrong with doing a fair bidding system, to keep on going until you have one man standing? It's pure greed.

elliott · 14/03/2007 09:48

Well, I'm not really sure what the differnece between 'sealed bids' and what we did is, but I think our approach was pretty fair - we had two people interested, neither had made an offer we found acceptable, so we asked them to make their best offers by a certain date. I think that is the best way to get the market value of the house and it was fair on the buyers too as they knew exactly where they stood and so did we.

katzg · 14/03/2007 09:48

Nearly all houses in Sheffield sell like this, sealed bids. Like everyone else has said you need to decide whats the right amount for you but also let them know how 'good' a buyer you are, have you sold yours, mortgage in place, can move quickly that can often be worth more to a seller than an extra £5K.

When we sold ours we chose the second highest bidder (only £500 in it though) because he was a first time buyer with a mortgage in place whilst the highest bidder had yet to get a mortgage offer. We did also um and ahh over the cash buyer but they offered £1k less.

MrsMills · 14/03/2007 09:50

Sorry, elliott, that wasn't a personal attack btw

elliott · 14/03/2007 09:52

No, I know - and I must admit I would find trying to buy under those circumstancse incredibly stressful. But it is hard to think of a system that is completely fair, particularly if there is a lot of competition to buy.

DominiConnor · 14/03/2007 09:53

I'm not an agent, but I have studied economics.
Offer 10% less.
Odds are that your bid will fail, but you stand a useful chance of a bargain.

MrsMills, it is no more "unfair" than any other bidding system. There is a whole pile of economic literature on bidding.
Both theory and experience show that it does not maximise the price paid for the goods.
The "last man standing" approach usually does better. It is far from unknown for bidders to stop thinking of the absolute amount of money but the "just a little bit more" that may secure the bid.

JolieGirl · 14/03/2007 09:55

2 things: first state very clearly in your bid your financial position ie do you have a mortgage offer in place, are you a cash buyer, do you have a property to sell etc. Your bid might not be the highest but if you can complete the fastest you may get lucky. Any supporting documentation you can add to support your statement so much the better. Secondly, make your bid an unusual figure not a rounded off one. So if the guide price is 385k then you might want to put forward £400,005 - or whatever - so that you beat someone who has put in £400,000 for example.

Original poster
RanToTheHills · 14/03/2007 10:11

thanks everyone. Just been checking land registry data online for actual houses prices, problem is no similar (ie detached)houses have sold at all over past 7years,only semis so proves how desirable it is,I guess,as owners rarely move, but hard to guage value.

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