Until yesterday I'd never heard of sealed bids, they are apparently common in Scotland, but in the five house purchases I've done over the years I'd never come across them.
Just parse that again, FIVE house purchases, that's above the national average, I've bought and lived in five different houses; I'm not talking about buy to let, I'm talking about my main house.
And in all those transactions the process was see the house, offer accordingly, offer rejected or accepted etc, so you knew your budget, you chose the value and off you go.
Now, as a vendor, this worked but you were never sure what other offers you might get, you certainly never found out whether the buyer was able to pay what they're offering; and recently that has been an issue for us, we rang up about £400 in solicitors fees only to find the buyer hadn't gotten enough from their property sale and they pulled out, so our chain collapsed.
Knowing a head of time if that buyer was going to be good for the offer they'd made would have been nice.
Indeed, I've only myself been able to offer once I was sold (subject to contract) and had a mortgage agreement in principle to offer against, this is what the vending estate agent is primarily paid to do, ensure the chain can be set up.
So 36 hours ago we offered on a house, lets say we offered £250,000. This was summarily dismissed, fine instant feedback, I can live with that.
We therefore upped our offer, £252,000... a 2K sweetener, literally. And we expected, just as the first offer, this to be accepted or rejected.
The vending estate agent they got our hopes for a simple transaction up by asking for both our agreement in principle and status of our sale, the proof needed for the vendor to know whether our offer was firm and real or not.
I duly handed these over, still expecting the call back that day saying "Great, accepted" or "No, rejected".... Now, I've shown my hand here, my agreement in principle was much higher than the price offered, I could offer more; much more in fact, and they now know this.
I don't know if there are any other offers, they've not just rejected my offer as too low, so I'm now flying blind. I can spent more, but I'm not willing to unless I have to.
Only now do "Sealed Bids" appear on the horizon, I receive out of left field this request for "best and final offer by 2pm".
I don't even know what this means, and I ask, but get literally ran around until not only am I annoyed with the agent, but I'm annoyed with the vendors, they just rejected an offer, clean, simple and normal the day before, today there's some shenanigans going on?
They've decided, or the agent has decided, AFTER seeing we can potentially offer more, to go for sealed bids. I literally say to her "I could offer more, but I'm not throwing money into the wind, either there are other offers and ours is now too low, or there's not and our offer can be accepted".
But she persists in this sealed bid, I don't change my bid.
And this annoys me, I'm thinking: "Are they just pushing up the price by scaremongering?" They've seen I can offer more, are there truly more offers in? If there are more offers in, are they now getting pushed around the same as me? or not..... Because the experience, the strategy they have here has just changed.
All in all I think it does the vendor down, this method is very off putting, they could get lots of low-ball offers, which any number of the potential buyers might be able and willing to offer more than, and ultimately it makes the buyer quite stressed.
Buying a house and moving is one of the most stressful things already.
It's already stressful, the housing market is already crazy, if you run into sealed bids folks just don't get involved.
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