Sealed bids - what to offer

[burntpinky]

House we like going to sealed bids. It’s on market at 850. Apparently at least 2 asking price or over bids. Is a bit of a wreck (though habitable with a fumigate, paint, new carpets etc) and would need to spend we reckon about 300-400k on it to get it how we wanted.

What would you offer to secure? Anything we offer over asking eats into renovation budget.

We’ve been looking for a house for over a year. In rental with nothing to sell. Mortgage to 684k approved in principle. But are told that other people may be cash buyers.

Fucking fed up of the whole thing and regretting selling our house but we are where we are

No idea on the bid, but it took us 2 years of looking to find the right house so chin up 👍😉

God, not sure my nerves can take another year of this! Plus we really need to get something before sept or we might not be able to borrow as much when our horrendous nursery fees kick in!

Can't give any advice on what to offer, but I have a colleague who wins every house he bids for as he gives backhanders to the estate agents via his lawyer , not ethical but seems to work for him.

We've won 2 sealed bid auctions - wrote a letter each time with offer and our circumstances. Set out what we were prepared to pay - one time we went about 5% over from memory, another time we went under. Both times we've set out in writing the basis of the offer - in rented, nothing to sell, can work to whatever timescales the sellers wanted. If they wanted a quick sale, H is solicitor and his firm will handle the purchase and push it through as quickly as possible. Buying as a family house, already renting in the area, want it to be our long term house, committed to sale, won't mess them about etc. One of them was a probate sale - in that one we also set out that they didn't need to clear the house, we were prepared to take as it was. Attached proof of mortgage and funds to make up balance, been successful both times.

Sealed bids in a lockdown? Brave seller! Offer what you think it’s worth, you may have some lunatics that over bid massively and pull out un 3 months (not a bad strategy by the way, although unethical) or no buyers to compete against. No one knows that’s the whole point right?

Make it an odd number like £873 instead of £870.
My last London house had three offers the first week on the market so went to sealed bids. I wouldn't waste too much time on a letter; the bottom line is the seller will go with a combination of best price and most proceedable buyer.

Thanks all!

Depends how much you want the place - bare in mind that if you go too far over asking your mortgage company may down value it anyway - especially if the place is a wreck. I would think twice about the hassle and additional cost of a doer upper at this price point - it would need to be a unique place location wise.

It really is a banging location which doesn’t come up very often - hence the battle for it - we are crunching numbers this weekend

Think of a figure then ask yourself 'If we are outbid will I wish we had offered more?'. That's the method we used to come up with our max figure. It sounds like the figure may not be the influencing factor though if there are cash buyers in the frame and you need a mortgage.

@burntpinky

It really is a banging location which doesn’t come up very often - hence the battle for it - we are crunching numbers this weekend

If it's "the one" then go for it. Give it as much as you can afford, but remember your mortgage valuation may not support your offer it it's too far over.

Also, unlikey to be a pure cash buyer at 850K. Most likely EA bullcrap. You're in a strong position being chain free.

Also, unlikey to be a pure cash buyer at 850K. Most likely EA bullcrap. You're in a strong position being chain free

You would be amazed how many cash buyers are out there, and who are capable of affording a lot more than £850k.

@Pipandmum

Make it an odd number like £873 instead of £870. My last London house had three offers the first week on the market so went to sealed bids. I wouldn't waste too much time on a letter; the bottom line is the seller will go with a combination of best price and most proceedable buyer.

Yes make it an odd number, i know someone who won a sealed bid on a house by about 20£. The house was worth about .5 million.

@Mildura

Also, unlikey to be a pure cash buyer at 850K. Most likely EA bullcrap. You're in a strong position being chain free

You would be amazed how many cash buyers are out there, and who are capable of affording a lot more than £850k.

Actually, many "cash" buyers turn out not to be cash buyers. Even very wealthy buyers won't necessarily have that much liquidity sloshing around in a current account, many will use some kind of borrowing against a pre-existing asset as part of the financing.

I also think different estate agents use the term “cash buyers” differently so what one agent might say is a “cash” buyer actually also means they need a mortgage

@burntpinky

I also think different estate agents use the term “cash buyers” differently so what one agent might say is a “cash” buyer actually also means they need a mortgage

Yeah that's super annoying. Some use "cash buyer" to mean chain free, which is nonsense.

Actually, many "cash" buyers turn out not to be cash buyers. Even very wealthy buyers won't necessarily have that much liquidity sloshing around in a current account, many will use some kind of borrowing against a pre-existing asset as part of the financing

I deal with high end property transactions for a living, purchase prices generally £1m - £4m.

Given what you can borrow money for today it is not uncommon to keep investments where they are and use some finance, however at least a third of what I deal with involves no finance at all.

After all that we’ve decided it’s too much work at this point in life (2 young DC’s) and instead, we are going to wait for my other property to sell (end March) and instead up the budget unless something comes on in the interim!

I think this one is best suited to someone with endless cash or a builder