If bidding in seal bid sale should one make their maximum bid immediately?

GervisLooper

Why do 'vendors' (silly term, reminds me of vending machines at the gym, ye I know technically accurate but why not call them sellers like a normal person would?) choose this style over an auction or private treaty (more obtuse language).

In this case does it work out the same for the buyer, in terms that the market would often find it's own price on the other two, so you are just being short cutted to your maximum bid right away?

One other thing though. Can I be still looking at and potentially bidding on other places in the meantime because I don't want to wait 1 month+ and then be outbid/rejected for some other arbitrary reason and be tied up yet again for another month+ bidding on another?

Is it no harm no foul to do that? Is it like private treaty where for a bid you make there is no obligation to follow through should something better come along in the meantime? The sellers will do exactly the same thing anyway so seems fair game.

The whole arena appears rapacious from top to bottom and hideously cut throat and dog eat dog anyway with agents greatly exacerbating the issue baiting both sellers and buyers, baying for blood making things worse.

BarelySentientAI

GervisLooper said:

In this case does it work out the same for the buyer, in terms that the market would often find it's own price on the other two, so you are just being short cutted to your maximum bid right away?

Yes - and people are often tempted to bid higher because there isn't a chance for back-and-forth and they worry about missing out.

GervisLooper said:

One other thing though. Can I be still looking at and potentially bidding on other places in the meantime because I don't want to wait 1 month+ and then be outbid/rejected for some other arbitrary reason and be tied up yet again for another month+ bidding on another?

Is it no harm no foul to do that? Is it like private treaty where for a bid you make there is no obligation to follow through should something better come along in the meantime? The sellers will do exactly the same thing anyway so seems fair game.

Yes, completely.  As long as it's not an auction, sealed bids are not binding, it is just the same as 'normal' offers.

GervisLooper said:

Why do 'vendors' (silly term, reminds me of vending machines at the gym, ye I know technically accurate but why not call them sellers like a normal person would?) choose this style over an auction or private treaty (more obtuse language).

The whole arena appears rapacious from top to bottom and hideously cut throat and dog eat dog anyway with agents greatly exacerbating the issue baiting both sellers and buyers, baying for blood making things worse.

If you have something to sell, you want the best price.  When an expert advises that this is the way to get the best price, why wouldn't you?

It's far better than MMOA as far as a buyer is concerned.

Mark_d

A sealed bids process is much easier to manage than a regular auction.  People might bid the maximum they're willing to pay.  No-one gets caught up in the adrenaline of an auction, and ends up paying more than they can afford....Additionally for the seller, they see everyone's final bid at the same time, so they get a very good price for their property. It's very much a gamble for the buyer - you can make a high offer to give you the best chance of securing the purchase...but you might end up paying a lot more than you needed to.

With a regular sale, a potential buyer makes a reasonable offer at the earliest opportunity.  The seller then makes and decision and if accepting the offer, they take the property off the market.   The buyer can get a good deal if they make a reasonable offer quickly.  The buyer doesn't have to start with their maximum bid because they can increase their offer in negotiation with the seller.

I think you'd be in a mess if you win the auction on multiple properties.  I believe there is an obligation to proceed with the process.

I think the fairest system would be standard auctions...but whatever system is used, if you're at a disadvantage as a  buyer then you will likely be at an advantage when you are selling.

Millsandovis

Sealed bids are great for a seller. All bids in one go and you can make an informed decision on who to sell to 

GervisLooper

Mark_d said:

A sealed bids process is much easier to manage than a regular auction.  People might bid the maximum they're willing to pay.  No-one gets caught up in the adrenaline of an auction, and ends up paying more than they can afford....Additionally for the seller, they see everyone's final bid at the same time, so they get a very good price for their property. It's very much a gamble for the buyer - you can make a high offer to give you the best chance of securing the purchase...but you might end up paying a lot more than you needed to.

With a regular sale, a potential buyer makes a reasonable offer at the earliest opportunity.  The seller then makes and decision and if accepting the offer, they take the property off the market.   The buyer can get a good deal if they make a reasonable offer quickly.  The buyer doesn't have to start with their maximum bid because they can increase their offer in negotiation with the seller.

I think you'd be in a mess if you win the auction on multiple properties.  I believe there is an obligation to proceed with the process.

I think the fairest system would be standard auctions...but whatever system is used, if you're at a disadvantage as a  buyer then you will likely be at an advantage when you are selling.

If you didn't win in that 'one shot' once the bids were reviewed is there no later negotiation? Just a once chance thing?

For instance on a private treaty where I gave a low bid recently - in hindsight I think the agent was stringing me along as they told me early that it would be lower and then suddently a -correcttion- and I read that this is a common tactic they use to drum up false interest.

I was blown out of the water quickly as others came in but when enquired about the price - as the agent stopped updating me now he had 'real buyers' he told me they were in 'best and final offers' stage.

Now I could not compete at that price for that one but wondered if there are best and final offers for sealed bids or not since it would undermine the whole thing and the first bid is final?

GervisLooper

Millsandovis said:

Sealed bids are great for a seller. All bids in one go and you can make an informed decision on who to sell to 

Yes makes sense now having read about it a little more. Great for the seller bad for the buyer. If not bad, at best neutral but I think always bad, or rather worse than other styles mentioned, in the sense you would never know what the other bidders bid so bad in that you didn't get to know the real market value. Neutral in terms of if you get it and were willing to pay that anyway.

BarelySentientAI

GervisLooper said:

Millsandovis said:

Sealed bids are great for a seller. All bids in one go and you can make an informed decision on who to sell to 

Yes makes sense now having read about it a little more. Great for the seller bad for the buyer. If not bad, at best neutral but I think always bad, or rather worse than other styles mentioned, in the sense you would never know what the other bidders bid so bad in that you didn't get to know the real market value. Neutral in terms of if you get it and were willing to pay that anyway.

No way is sealed bids worse than auction (for a novice or lay buyer) or MMOA (for any buyer).

Millsandovis

GervisLooper said:

Millsandovis said:

Sealed bids are great for a seller. All bids in one go and you can make an informed decision on who to sell to 

Yes makes sense now having read about it a little more. Great for the seller bad for the buyer. If not bad, at best neutral but I think always bad, or rather worse than other styles mentioned, in the sense you would never know what the other bidders bid so bad in that you didn't get to know the real market value. Neutral in terms of if you get it and were willing to pay that anyway.

For what it’s worth, I do think there is some guidance on what to offer from the estate agents. I recently sold with a bid process and could tell from the offer letters that it wasn’t their first and final offers. Obviously agents work for the sellers to get the highest price. 

Not sure if my process was ‘sealed’ bids or just a normal bid process but there was definitely opportunity to increase the bids. It’s in the agent & seller’s interests to get the highest price so I don’t know why they wouldn’t advise potential bidders on what to offer 

SiliconChip

In Scotland it used to be the case that sealed bids was pretty much the only way to buy other than new builds and auctions. Everybody used a solicitor who knew the local market and could provide advice on a bid that might stand a good chance of winning, although IIRC it took me 3 goes to obtain my first property in Edinburgh and I probably did offer a little too much having failed in my previous 2 bids (although I made a lot of profit selling it so the overpayment didn't matter in the end). More recently I believe some elements of the English style of purchasing has crept into Scotland but there are some areas where the market is hot where sealed bids is still the primary method of buying.

And as mentioned in another post the vendor gets to choose which bid to accept, which doesn't necessarily have to be the highest one, although it usually is.

GDB2222

GervisLooper said:

Mark_d said:

A sealed bids process is much easier to manage than a regular auction.  People might bid the maximum they're willing to pay.  No-one gets caught up in the adrenaline of an auction, and ends up paying more than they can afford....Additionally for the seller, they see everyone's final bid at the same time, so they get a very good price for their property. It's very much a gamble for the buyer - you can make a high offer to give you the best chance of securing the purchase...but you might end up paying a lot more than you needed to.

With a regular sale, a potential buyer makes a reasonable offer at the earliest opportunity.  The seller then makes and decision and if accepting the offer, they take the property off the market.   The buyer can get a good deal if they make a reasonable offer quickly.  The buyer doesn't have to start with their maximum bid because they can increase their offer in negotiation with the seller.

I think you'd be in a mess if you win the auction on multiple properties.  I believe there is an obligation to proceed with the process.

I think the fairest system would be standard auctions...but whatever system is used, if you're at a disadvantage as a  buyer then you will likely be at an advantage when you are selling.

If you didn't win in that 'one shot' once the bids were reviewed is there no later negotiation? Just a once chance thing?

For instance on a private treaty where I gave a low bid recently - in hindsight I think the agent was stringing me along as they told me early that it would be lower and then suddently a -correcttion- and I read that this is a common tactic they use to drum up false interest.

I was blown out of the water quickly as others came in but when enquired about the price - as the agent stopped updating me now he had 'real buyers' he told me they were in 'best and final offers' stage.

Now I could not compete at that price for that one but wondered if there are best and final offers for sealed bids or not since it would undermine the whole thing and the first bid is final?

Sealed bids is usually the end of the process. 

Albermarle

GDB2222 said:

GervisLooper said:

Mark_d said:

A sealed bids process is much easier to manage than a regular auction.  People might bid the maximum they're willing to pay.  No-one gets caught up in the adrenaline of an auction, and ends up paying more than they can afford....Additionally for the seller, they see everyone's final bid at the same time, so they get a very good price for their property. It's very much a gamble for the buyer - you can make a high offer to give you the best chance of securing the purchase...but you might end up paying a lot more than you needed to.

With a regular sale, a potential buyer makes a reasonable offer at the earliest opportunity.  The seller then makes and decision and if accepting the offer, they take the property off the market.   The buyer can get a good deal if they make a reasonable offer quickly.  The buyer doesn't have to start with their maximum bid because they can increase their offer in negotiation with the seller.

I think you'd be in a mess if you win the auction on multiple properties.  I believe there is an obligation to proceed with the process.

I think the fairest system would be standard auctions...but whatever system is used, if you're at a disadvantage as a  buyer then you will likely be at an advantage when you are selling.

If you didn't win in that 'one shot' once the bids were reviewed is there no later negotiation? Just a once chance thing?

For instance on a private treaty where I gave a low bid recently - in hindsight I think the agent was stringing me along as they told me early that it would be lower and then suddently a -correcttion- and I read that this is a common tactic they use to drum up false interest.

I was blown out of the water quickly as others came in but when enquired about the price - as the agent stopped updating me now he had 'real buyers' he told me they were in 'best and final offers' stage.

Now I could not compete at that price for that one but wondered if there are best and final offers for sealed bids or not since it would undermine the whole thing and the first bid is final?

Sealed bids is usually the end of the process. 

Based on my experience in another industry, my question is what happens if the highest sealed bid is from someone in a long chain, and the next highest bid is from someone with nothing to sell?
I suspect there would be further discreet negotiations to try and get the one with nothing to sell to up their bid ?