With record numbers of purchasers and vendors looking to move home since the pandemic began, sealed bids have definitely become more prevalent and we’re using them more and more in our Cheshire property sales. Those selling a home have been receiving more offers and maximising the selling price and so the use of sealed bids is an attractive prospect to vendors looking for a solid buyer and a good price.
A number of our recent sales have been conducted using sealed bids – the process by which a number of potential purchasers submit a private bid for a property – and it’s a popular way for vendors to receive a high number of bids in a short space of time.
How does the process work?
In essence, sealed bids – known as informal tender – form part of a concealed auction, whereby potential purchasers submit their best offer within a specific time period. A vendor then looks at all of the offers on the table and makes a decision about whose – if any – offer they will accept. The chosen buyer is then the winning party and the legal process of buying the property begins.
Where they are many people making offers, sealed bids can be a very fair way to ensure they all get the opportunity to have their offers considered.
What are the benefits?
The benefits to the vendor include a speedy process, with viewings and sealed bids happening at a quick pace, giving them peace of mind that they have several bids on the table and will be able to sell their home quickly. They’re able to consider all offers at the same time.
For purchasers it’s important to remember that the highest bid is not always necessarily the bid a seller will choose. While offering a fair bid for a property is important, a seller will also look at those most able to proceed quickly, be that a cash offer, bridging finance in place or their property already under offer.
As Crispin Harris, director at Jackson-Stops Alderley Edge notes: “Our best advice for bidding in a sealed bids process is to make sure you think about a bid you’re going to be happy with before you offer. It’s difficult to gauge, but your sealed bid should be one you know you won’t regret making and that you feel comfortable with. It’s important to think about the top bid you’re prepared to make. A good barometer is to think of the figure where you know you wouldn’t be prepared to bid £1,000 more than the bid you intend to make. It’s a good idea to include a letter setting out your financial position to show the vendor that you are a serious contender with all of your ducks in a row.”
