Whilst house prices have started to fall, many are starting to see house sellers (vendors) and estate agents moving to ‘best and final offer’ deadline requests and sealed bids to speed up the ‘sale agreed’ process.
Analysis by MPowered Mortgages publish this week suggests that currently 1 in 3 houses for sale are now on a sealed bid basis.
In addition, we have seen another report suggesting that two thirds of house sellers want a chain free buyer, as you would expect for a quicker turn around.
What is a Best and Final Offer ‘Sealed Bid’?
Sealed Bids are regularly requested when there are multiple parties interested in a property that is attractive, competitively priced, in a particularly popular area or indeed there is a need for a fast sale to reduce the time used in negotiating with potential buyers. The vendor or their selling agent asked interested parties to make a ‘best and final offer’ in a sealed envelope. In short, no more negotiations, ‘let’s get the deal done’.
Comment - Why more sealed bids now?
Both buyers and sellers may be interested in moving the sale process on more quickly at present due to recent stamp duty reductions, trying to beat any future interest rate rises, trying to sell quickly when property prices look set to fall or with the coming Budget (17th November 2022) fear of potential increases or changes to capital gains tax for investment properties.
To be honest, we suggest a sealed bid approach may get a price agreed early but just because you accept an offer from a buyer e.g., because it is the highest, it does not mean it will follow through is a valuer or surveyor subsequently down values the property due to forecast property price falls.