‘Sealed Bids’ is becoming an increasingly common phrase in the London residential property market as vendors are experiencing an unprecedented level of demand in the Capital. Having performed remarkably well over the last 2 years, during a time of great austerity and a double (almost triple) dip recession, figures show that prices in most prime parts of the capital are growing at close to 10% year on year and the future looks equally positive.
Part of the reason for this is the disproportionate level of demand for property, inflated by interest from overseas investors. When a decent property comes to the market and is priced vaguely sensibly, more often than not there is a queue of buyers, and vendors are beginning to take advantage of this, attempting to maximise the selling price by going to sealed bids.
In short, sealed bids are part of a concealed auction in which each of the interested parties submits their best and final price to the vendor (or estate agent if one is appointed) by the deadline given. These are then considered by the vendor and one buyer is selected to move forward with the property purchase.
This process, while ultimately deemed to be the fairest way of finding the best bid or bidder within a prescribed timeframe, is essentially a lottery for the parties concerned. They need to decide what they are prepared to pay for the property, which by this stage is normally above the quoted asking price, guess at what level the other parties are going to pitch and choose whether to pay a possibly inflated amount in order to have a chance of winning the process.
However, when it comes to sealed bids, it is not always the case that the property be sold to those who submitted the highest offer. In cases where the bids have been close, we have found that the vendor will not necessarily favour the highest bidder, but instead will often prefer the bidder who looks most likely to proceed to exchange and onto completion.
In this instance, a carefully planned and worded offer letter is paramount in maximising ones chances of being selected, and proven representation from a professional further increases the success rate. Garrington has often been involved in this process and we firmly believe that our team has the experience and expertise to increase a buyer’s chances, while not necessarily paying the highest price.
Of the multiple parties involved in the sealed bids, possibly only one or two will have a buying agent acting for them. So, unless your bid is significantly above the others, a sealed bid with Garrington on the letterhead is likely to carry far more weight. Entering sealed bids without representation is a bit like playing in an orchestra without a conductor, contact Garrington to find out how we can increase your chances of winning sealed bids.