By George Barkes of Stacks Property Finders
The sealed bids process – where purchasers submit their final offer by a specific time and date – should be more transparent, according to a buying agent.
George Barkes, who represents Stacks Property Search & Acquisition’s Cotswolds office, describes the sealed bids process as ‘badly outdated’.
“They should be restructured, formalised and made more transparent,” he argues.
Barkes suggests that buyers should have to prove they can proceed in advance and that as is customary in the property auctions sector, winning bids should be legally binding.
“The current system is virtually impossible [for the purchaser],” says the buying agent.
“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.”
He says that because the acceptance of an offer is not legally binding, if a new buyer appears with a higher offer, things can change very quickly.
The agent says that despite a current period of low transactions, his firm is seeing a significant number of property marketing campaigns culminate in a sealed bids process.
He adds that sealed bids are not being used solely for the preserve of ‘top dollar’ properties and that it is being used as a method of sale across all price brackets.
The agency says it advises buyers to try and get the vendor to accept an offer before the sales process gets to the sealed bids stage.
It points out that sealed bids can be a ‘beauty parade’ as well as a bidding competition, stressing that proving ‘commitment, proceedability, ability to exchange quickly and flexibility of terms’ are equally as important as a good offer.
Stacks says it also advises buyers to ‘quiz and badger’ the selling agent to get information. Although selling agents are unable to reveal the sum of the bids, they are able to discuss the number of bidders and how many offers were made before the sealed bids process.
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