What Causes The Most Stress For A 2-Bed London Apartment Buyer?
So…
You’ve found a 2-bed apartment that you would like to call your London home!
Fantastic!
However, the seller has a little trick up their sleeve…
“Sealed Bids” OR “Best and Final”…
What are “sealed bids” or ‘best and final” offers?
Simply, it is here the buyer has to put their best foot forward and offer the maximum amount that they are willing to in order to acquire a 2-bed apartment.
It can be a huge advantage to the seller and has been the norm in Scotland for a number of years (as well as “Offers Over” due to the fact that the home seller in Scotland has to get a home report/ basic survey done before selling), but it is also seen in London, for apartments which are expecting multiple bidders.
Why would an apartment receive multiple bidders?
1. It could be a genuine one of a kind 2-bed property, such as a duplex lateral flat on Mount Street in Mayfair or an apartment in the best part of Jermyn Street in St James’s…
2. It is a ‘doer-upper’ or a ‘fixer-upper’ 2-bed apartment, in a sought-after area of Prime London, such as Hampstead. These kinds of 2-bed properties are a developers dream, (if, of course, they can acquire it at the right price to make their numbers ‘stack up’)…
3. It has been put on the market at below the current market value, inviting lots of interest, which is likely to drive the price up (think supply and demand!)…
A sealed bid is where the estate agent (who always acts for the seller) asks all interested buyers to submit their best and final bid, in writing, by a set date and time.
Pros for the seller include potential buyers bidding a lot more than what the current market value is - due to the fear of missing out, as well as often receiving multiple offers on their property.
It’s not all sunshine and roses, though… Sealed bidders (can of course!) bid a lower amount than they would be willing to pay for it on the off chance that it will be accepted, or they refuse to bid at all.
Sealed bids can also cause a huge amount of stress amongst bidders because there is no ‘right answer’ as to what they should bid.
There have been numerous reports of people seeing the amount that said 2-bed apartment has sold for and then explaining that they wouldn’t have paid an extra £150,000 to secure the 2-bed apartment, proving that it’s not always wise for the sellers to resort to using this technique.
“Sealed bids can also cause a huge amount of stress.”
So, if you find yourself offering on a 2-bed apartment that has sealed bids, what would I recommend?
1. Offer the maximum amount that you a) can afford and b) are willing to pay for the 2-bed flat. Offer the maximum amount that you are willing to offer to the point where if someone else bids higher than you, and gets it, you don’t regret it afterwards.
2. Follow Step 1!
Have you ever offered on a 2-bed apartment with sealed bids or best and final offers?