Sam Dunn: ‘Should we try a sealed-bid sale, or use the tried and tested method?’
Wednesday 02 December 2009
Question: Our last two house moves were protracted and very stressful with aggressive buyers, so we’re keen to sell our family home using the sealed bid process this time. Yet our estate agent, who admits he’s never tried one, doesn’t seem overly keen and thinks we should stick to the tried and tested method instead in this market. Should we listen?
Peter J, Warwick
Answer: Cloak-and-dagger bids, gummed envelopes, feverish sentiment and sky-high prices: a sealed bid is usually the choice tool of sellers in housing market heydays. It tends to encourage bidders to put in higher prices to beat the unknown amount of rival offers.
But in today’s housing climate – chilly – a sealed bid won’t have any special appeal, warns James Brooks at property agent Kinleigh Folkard & Hayward. You really need to have something unique that you are selling, he stresses.
“If there are alternative properties on the market that are similar, why would a buyer not go for those instead of being involved in a sealed bid?”
As a general rule, a sealed bid suits an owner but buyers “do not like it” he adds.
“It can make for a protracted sale if a buyer feels he is paying over the odds. He will expect to get things his own way: timescales, a survey, goods left behind etc.”
However, it does feature one element that could favour your desire for a sealed bid: a dearth of high-quality properties.
A sorely limited supply of decent homes on the market has left many buyers in a bind: Britain may well be in recession but pent-up demand for good properties has left many house hunters in a much weaker position than anticipated. According to the National Association of Estate Agents, estate agents registered an astonishing five buyers to every available property which bolstered prices: last month, the Halifax recorded a 1.2 per cent house price rise, nudging the average value to £165,500.
In this light, a sealed bid could work to your advantage and secure you a higher sale price. The straightforward process, says a spokesman for online property agent Findaproperty.com is a two to three-week marketing period, when interested parties can view your property several times. “This way, they can take advice from builders or surveyors without the usual time pressure.”
With help from your estate agent, set a date and time to receive the sealed bids in writing making clear your minimum bid.
Then you simply open all bids on the day and pick either the highest or the one offering the speediest move if you’re after a quick sale.
Be warned, though: like any other sale, a bidder could still decide to pull out at any time up to exchange of contracts. There’s no binding legal application to any offer for your home.
If you find identical bids, either ask for a second round of bids or see which buyer will exchange first.
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