How do you feel about sealed bids? Would it put you off at all?

[motherofallhangovers]

If you were interested enough in a property to make an offer, and were then told there were others interested and it was going to go to sealed bids, would this put you off at all?

Have you ever been involved in a sealed bids process, as a vendor or buyer?

I cannot see how it is fairer to the buyers - its a way of hyping up a sale and getting people to put in silly bids
it would put me off

So (have I missed this?) is there a lot of interest in your property?

We looked at one in Muswell Hill recently that went to sealed bids. A doer upper in an amazing location. There, they priced the place reasonably, got about 8 offers over asking price in the first two days, then went to bids (we walked away well before then because we tragically weren't rich enough ;) Bet they got a pretty penny.

I reckon the vendors will have done well out of that tactic, in which I include the fact of not overpricing in the first place and drumming up excitement. A lot of stuff I've seen has been priced way over, stuck for ages, and then sold at a good prices, but more comparable to last year's price than asking prices suggest.

I think it is as fair as anything else to go for sealed bids as a vendor. Any potential buyer can look at the Land Registry data and decide what they want to pay, whether on offer or on sealed bids. If people offer you vast sums, that is their lookout and judgement, you aren't making them, are you?

Mintyy no, not yet! But we have got one second viewing which is promising :) just the one, though, I am possibly getting a bit ahead of myself here! It's just the EA said they'd recommend it if there was a lot of interest and I was just wondering what people thought of it.
A sealed bids process would make me nervous, personally, as a buyer, but I'm not sure whether it'd put me off or not.

They are all very well until the mortgage company values the house and tells you you've grossly overpaid.

This process is normal in Scotland, but then offers become binding too very quickly, so there is much less uncertainty for the seller, as you don't have to worry about chains.

It wouldn't put me off at all because I see it as normal, and it doesn't mean that you have to over-bid as a vendor. I bought my last 3 properties each at 10% less than asking.

does anyone remember the "Location Location Location" episode where the buyers, advised by Phil and Kirsty, won a sealed bid on a property, but then there was a monumental cock-up at the estate agents where the final list of all the offers received was sent to phil and kirsty's couple (rather than to the vendor), and they discovered they had offered about 100K more than the next highest offer! (they pulled out).

It's a scenario like that which would scare me as a buyer - you can end up paying well over the odds.

I sold my first flat under sealed bids - that was in Scotland, where it is the norm. The bids are not just for the amount they were willing to pay but their proposed completion date. I was lucky, the highest bidder also wanted the quickest completion. Otherwise I might have taken a lower bid, if it saved me a month's mortgage payment.

I also bought in England through sealed bids. It was a horrible time, but no, it did not put me off. We were sure the estate agent was not playing games; the vendor was a charity which had been left the house by it's previous (deceased) owner; we offered the asking price but someone else topped us, so they asked for sealed bids. It seemed fair to me.

It works in Scotland because the system is different in its entirety. Not least you already have the survey report and valuation so its a case of what is this house worth to you. Can't see how it could work properly in England.

Wow this is a useful thread for me - about to offer in a sealed bids process! I am shitting myself nervous about it. DH reckons there is no other interest and the agents are trying to scare us into bidding over the odds, and he thinks we should stick to our original offer of the asking price and no more. I am a sucker and would like to offer our maximum. It's truly horrible and if I didn't love the house I would walk away. We walked away from a previous property that went to sealed bids because we didn't want to get involved in what felt like a feeding frenzy.

It doesn't have to be a feeding frenzy or a reason to overpay - you make the offer you want, if you don't get it then nothing lost. Sealed bids doesn't have to mean that people lose their heads.

It's horrible, isn't it Rhubarbgarden? At least for us, we were certain that there was another bidder. It's a judgement call - you have to both read the market, and decide how much the house is worth to you. Do you have any reason to believe there is, or isn't, another bidder?

Nobody trusts estate agents, and with good reason from some of these posts.

@Rhubarbgarden - can you ask to get the survey done in advance of the process? Shows commitment but also you won't be taken for a mug. Win/win?

Hanahsaunt we are going to go round the house with a guy from a specialist building renovation company this evening. Then at least we'll have a clear idea of what we would need to spend. It's a wreck - a survey is just going to say 'do everything'

The problem with sealed bids in London and Wales is that they're not legally binding at all (unlike in Scotland, as others have said). Agents just phone around afterwards trying to get the two or three leading bidders into a second round of bidding.

The problem with this is the danger of buyer's remorse. Chains fall through on these kinds of bids more frequently, either because the prospective buyer can't raise the funds to match the offer, or sees somewhere else that seems cheap by comparison, or simply gets cold feet after worrying they've overpaid, particularly in an overheating market like London.

I am not remotely surprised by the tactics used by kensington's friend. The other very popular ruse is to gazunder the day before exchange.

Mother, if you have multiple offers and just want the certainty of the best deal follow through, I'd ask for a completion race. Whoever gets to survey (or exchange, if you're feeling particularly ballsy) first wins.

Having just lost out in a sealed bid I feel it's yet another spoke in the wheel of the cut throat business of buying and selling a property.

We have been the only people after a house for weeks, dropped price on our place to push a quick sale through and made an offer on the house we wanted. All of a sudden someone else appears and makes an offer. Although we are in a very strong position the other person is in rented so no chain. Rather than negotiate with that person the vendor went to sealed bids. We offered over the asking price, vendor chose the other person due to their position.

Can't help but feel we were both just put into a position to bump up the price as there is no stock this side of the olympics and us serious buyers are desperately competing for what little there is. I suspect the vendor always wanted to sell to the other people and just got a premium going for a sealed bid rather than a simple negotiation.

Sorry minor rant, still smarting from wondering what the hell we are going to do!

Oh, sorry, that really sucks Ouchy .

We looked at one and it went for 120,000 over in sealed bids.a 1.4m house went for 200k over.its mad.

Hifi - where was that? London?

Thanks mintyy .

At the start of our house sell / buy scenario I started a thread 'what's more stressful buying a house or having a baby?' I couldn't believe this would be harder to go through than adjusting to motherhood. Cor, at least there is some pleasure in the baby, this house scenario is just a grim, soul destroying slog.

Right, enough moaning ouch things have a habit of working out, and things could be far far worse.

I should say OP, just because my fingers have been burnt am not about to take the moral high ground. It's a ruthless industry and am sure if an agent had thought we'd get a better price, from a strong buyer, by going to sealed bids we'd have probably done it.

Bad ouch.

Just before the height of the market we were looking at trading up in South Manchester, we looked round a house on an open day, we were in just before lunch there were that many. We were told at the first viewing that it would be going to sealed bids due to the level of interest.

We walked away and didn't go back for a second viewing, lovely house but we weren't about to get into a bidding war and pay over the odds for a house. At that time gazumping was a problem, yes it was a long time ago, and had already been burnt by that, so we preferred a straight forward negotiation.

House buying is hell, we have been 'lucky' in that every house sale / purchase have been when we have either been renting or going to move into rented accomodation. Chains are hell at the moment.

Thanks all, that's really useful advice.

So I guess I need to be aware that doing sealed bids may well scare potential buyers off, and/or make them think we're just trying to screw extra money out of them. (I wouldn't use it like this I promise!)

But if there genuinely is a lot of interest it could be an effective way to get a good price (even though no one involved will like the process, probably).

Ouchdownthere that must be so infuriating! I would be in your position.
I hope you find somewhere soon that's much nicer anyway :)