Sealed Bids and Private Sales

Auctions usually work on a pretty open basis. You’ll make a bid and if someone wants to top it they will do, there and then. So you’ll hear what they’re now bidding then you can, if you choose to, up your own bid and so on. This is how most auctions of all varieties work.

Even when potential buyers bid from home on the telephone they are speaking with an operator who is present at the auction and is acting as their ‘voice’. The operator will relay the bids made by the potential buyer to the auctioneer and will also tell the buyer what is going on in the auction room.

However there is a way in which potential buyers can make bids without any of the other buyers knowing what they’ve offered. These are called sealed bids. Everyone who wants to make an offer on the property has to write their offer on a piece of paper which is then put in an envelope. The bids are all opened when the lots comes up.

The Dangers of Sealed Bids

The problem with sealed bids is, without the knowledge of what other potential buyers are bidding it is much more difficult to get the property you want at a decent price.

There is the danger you may bid far too high for a property in the hope of winning the deal. Alternatively you may desperately want the house but you may, unknowingly, bid much less than your competitors. In an open bid you may have upped your offer when you heard what others were offering but with sealed bids this is not possible.

Sealed bids therefore are best for experienced property professionals who know how much a house is worth and are at no risk of paying well over the odds or losing the property by offered well under.

If you are making a sealed bid then make sure you only pay what you can afford. Avoid rounded figures as it is more likely others have gone for this. So if you afford £500,000 perhaps offer £500,021. That £21 will not break the bank and could mean the difference between getting the property and losing it.

Private Sales

Private sales are usual done using private sale websites. It means estate agents do not need to be involved and so the seller saves a fortune on costs. The seller must prepare for the sale in the usual way with a surveyor etc but he or she does not have to pay for an estate agent to market and sell the house.

Private sales are usually a safe bet as the house has been valued but it is important to arrange a viewing and bear in mind you may not get the discount you could expect from a property auction.

Sealed bids, if you are experienced, can help you get the house you want quickly and easily but beware, if you are not experience, you could end up making a big mistake with the cost.