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Bidding wars….The survival guide

Last Updated: 04/02/2014 18:15:59   Tags: Sealed Bids, Competition, Property Market,

Whether you are a first time buyer, a dab hand looking to increase your property portfolio or a Buy to Let wannabe, nothing really prepares you for the dreaded Sealed Bid scenario. I mention this as it has been creeping back over the past year and during the last couple of weeks in particular; virtually every new property that we have taken on has gone through this nail biting process.

Richmond Road; had 45 viewings resulting in 11 bids, St Marks Rise; 21 Viewings - 6 bids, Gainsborough Studios; 32 viewings - 5 bids….so far. I could go on but I won’t, you get the idea.

No one likes it when it goes to best bids…well apart from the owners. That said, yes, they do tend to do well out of it, but deciding between offers is no easy task. It’s not always as simple as who has bid highest, deciding factors can be …

1. Who can move the fastest
2. Are you chain fee
3. Flexible on completion date
4. Can provide proof of funds/ brokers details
5. Will put a holding deposit down
6. If the owners have met the buyer they may just ‘want them to have it’

Or it can simply come down to…

7.  Owners having to scrutinize various mortgage deposit percentages.

For prospective buyers this can feel like an interrogation and occasionally people opt out of even viewing a property if it looks like it will go this way. What I will say to those people, is yes it’s a little unpleasant but what it does indicate is the property is in demand, so a solid investment and therefore A GOOD BUY! I’d be more worried, if there was no one rushing around to view. Also, you are missing out on your potential dream property in the hope that it will turn up and no one else will want it…see my point?

Best Bids are not a cruel invention of estate agents to extract as much of your money as possible. They are there to make the process fair for all bidders. Everyone is in the same boat, everyone has to make up their own mind as to what they feel happy bidding and importantly, no one knows what someone else is offering. If you don’t want to go up, no one is going to make you, you are in control.

Having been in this position a few times myself as well as of course, professionally, the best advice I can give anyone faced with this situation is ‘bid what you are happy to lose it for’. Meaning: DON’T retort to the agent after finding out you weren’t successful, you could have bid an extra £10,000 etc…by that time, you’ve muffed it.  Sorry to be brutal but only being cruel to be kind.

I do appreciate how hard this can be, especially if, like me, you have been bought up to haggle for everything! We all like a bargain and never like the thought of paying over the odds, but there are times when you have to roll up your sleeves, take a deep breath and enter the ring fighting. If you want it, you have to fight for it. Rocky didn’t win any fights by being tentative he went hell for bells. So dig out that old sweat band, grab a dog (preferably not a Saint Bernard, don’t think you want to attempt lifting one of them) and get ready.

One thing I’d like to add on behalf of agents…we do actually want you to win. We want the best for you, yes we are acting on behalf of the vendor but we build up a rapport with you, we know what you want and can see you would be happy there, we get excited because you’re excited. We aren’t callous individuals desperate to drive the price to top up our commission, doesn’t work like that. You will buy where we live and work and I, for one, don’t want my neighbour to be cursing me every day we meet in the street. It’s horrible having to tell people they weren’t successful. No one likes to tell anyone you didn’t get the job or you didn’t get the A+ you hoped for. Same applies to us.

In this market, which shows no signs of slowing…if you want to find a new home… get bullish. Otherwise by the end of the year you may not be able to even afford what you liked at the beginning.