Healthy Competition

Competitive and sealed bids have always had their place in the UK property market, but the pandemic brought about a huge disparity in supply and demand that has meant that in some areas sealed bids have almost become the norm, Abode2 explores further

Clare Coode of Stacks Property Search says, “The system can work very well for the vendor, but is undeniably stressful for the buyer. Submitting the highest bid won't necessarily secure the property; the vendor and agent will weigh up all the information and make a choice on the basis of the size of the offer AND the situation of the buyer.

“Recent months have seen variations on a theme. Agents ask interested parties to get their bids in by a certain time/date, then they tell the under-bidders what the top bid is, giving the others the opportunity to raise the offer. Another emerging trend is for informal auctions conducted on virtual platforms such as Zoom.

“As a buyer it's worth knowing that the size of your bid is not your only strength. As buying agents working on behalf of buyers, we will do a lot of legwork, and make it clear when the offer is submitted that we know about the issues that another buyer may not find out about till further down the line – when they may pull out of the sale or try to re-negotiate. So for example, if we know the farm next door is being developed, or we know a wind turbine is coming, or if we can see that the roof needs some work, we'll say that our bid takes these aspects into consideration.

“Find out as much about the vendor as possible. It's not always about money. We know of vendors who have chosen an underbidder simply because they like them more than the top bidder, or sometimes rejected the top bidder because they know they plan to rip out all their interiors. We know that in holiday destinations, vendors will often select the bidder who is planning to be a full-time resident of the property, with, for instance, children attending the local school.

“Agents sometimes recommend that buyers use a good buying agent as they know that checks will already have been done and that the buyer is well qualified and a 'safe bet'. Also that the buying agent will have done considerable research and due diligence into the property so that the risk of the buyer pulling out at a later date is considerably reduced.

“In all situations the buyer should 'dress' their bid, demonstrating their commitment, proceedability, ability to exchange quickly and flexibility of terms. They should provide proof that they have immediate access to funds, and include a list of advisors such as solicitors and finance providers that will further reassure the vendor.”

www.stacks.co.uk