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Sheffield house buying system -Closed bids?

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05-11-2018, 22:19   #21
Cyclone
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Quote:
Originally Posted by Jeffrey Shaw View Post
Not every offer is equivalent.

Consider that V might receive various offers from:
a. a first-time buyer with mortgage advance required;
b. a cash buyer who is offering less;
c. a buyer with another property to sell, no mortgage advance requirement, but who is offering more;
etc. etc.

V can never know whose offer is 'best', as there is no such thing. Each offer has advantages and disadvantages.
V can be informed of all those circumstances and decide as they wish though. They aren't obliged to just take the highest number.

Sealed bids definitely favour the seller though, they're designed to do so.
Open bidding favours the buyers, but I can see why it's perceived as more fair.
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05-11-2018, 22:54   #22
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I'm due to be moving house in a couple of weeks, and I'm moving to my 5th choice house, having missed out on being the accepted offer for all of the other 4, despite offering well over the asking price and having my buyer already in place.

The really galling thing is that three of the previous four fell through, and all were reoffered to me at a lower price than I'd originally offered, after I'd already paid for a survey and searches on the house I'm actually moving to. No idea why, maybe I'd have backed out too if I'd paid for searches and a survey on them.
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05-11-2018, 23:09   #23
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Quote:
Originally Posted by Billy-Jean View Post
There’s a big difference buying something on ebay from £1-to maybe a few hundred pounds. Than buying a house we’re we talking £250k +
The link has gone now, but six months ago there was an ex-Russian military MIG fighter on eBay for £1.5 million.
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06-11-2018, 09:37   #24
mossdog
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Sealed bids can be a can of worms!......the estate agents love them,because in certain cases they can often sort out the best deal for themselves,ie,if a buyer has a house to sell but is not reliant on the sale to purchase the new house,and agrees to sell their existing house through the same agent,they will be looked upon very favourably in the sealed bid farce even if their's is not the highest offer!................not all agents of course!
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06-11-2018, 12:14   #25
arthurseaton
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Quote:
Originally Posted by makapaka View Post
Yes but as with anything the house is worth what people are willing to pay for it.
Not true. In the example given in this thread there may be two or three people who have a wildly inflated perception of the true value of a property. There may be hundreds of other prospective buyers who believe the price to be way out of line with it's true value. Of course we don't hear from them as they are don't make an offer or else their offer is rejected. The house goes to sealed bids and is sold for a price which is above it's real value. The reason? They have paid more than what MOST people would be prepared to pay for it.

http://www.arpeggioadvisors.com/valu...e-in-business/

Of course, the idea that a property is worth what people are willing to pay for it is so widespread that those who don't prescribe to this view struggle to buy in a rising market. In a falling market such as London those who use reason to value a house are foiled because, surprise surprise, the sellers, when forced with offers well below their perceived value of their property, simply withdraw the house from the market. 50 % of properties in London are now withdrawn from the market having failed to sell. Seems the theory only works one way doesn't it .
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06-11-2018, 12:31   #26
geared
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Quote:
Originally Posted by Cyclone View Post
Sealed bids definitely favour the seller though, they're designed to do so.
Open bidding favours the buyers, but I can see why it's perceived as more fair.
Although if it relies on the agent telling people what the current highest number is the open system can quickly fall apart.
All they've gotta do is fob someone off and see who is willing to pay the most.

(current bid is £240k)

"Yes sir, current bid is £250k, you wanna go £260k ?? Ok great!"
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06-11-2018, 12:34   #27
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Quote:
Originally Posted by geared View Post
Although if it relies on the agent telling people what the current highest number is the open system can quickly fall apart.
All they've gotta do is fob someone off and see who is willing to pay the most.

(current bid is £240k)

"Yes sir, current bid is £250k, you wanna go £260k ?? Ok great!"
That's just fraud though, get caught and they'll go to jail. A big risk to take.
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06-11-2018, 13:23   #28
arthurseaton
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The agent doesn't need to take a risk. It only takes one buyer with a wildly misguided idea of the value of the property to make a bid and the need for any fraud in the legal sense to take place is negated. eBay auctions don't work like this because if the buyers were ripped off to this extent eBay would cease to exist overnight. The fact that this is the model for property should really make the ,ahem, 'buyer beware'.
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06-11-2018, 13:25   #29
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Originally Posted by amazon123 View Post
If it's a popular house in a desirable area then sealed bids are definitely becoming the norm. My house was sold two years ago using this system (with multiple bids considerably over asking price) and other houses I've looked at buying since have also gone to sealed bids. If the agent sees substantial interest then they will go down this route. Not only does it generally lead to the best price for the seller but stops them having to field multiple offers creeping up and up. They can just say "best and final offers by 12 on Friday" and see what happens.
When I bought my house three and a bit years ago, every house I offered on went to sealed bids straight away.

---------- Post added 06-11-2018 at 13:30 ----------

Quote:
Originally Posted by Cyclone View Post
That's just fraud though, get caught and they'll go to jail. A big risk to take.
I suspect its unlikely they can be caught though, unless you know one of the buyers (e.g. the one with the 240k bid) and exchange information.
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06-11-2018, 13:47   #30
Cyclone
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Is it a risk worth taking for the agent? They gain what, maybe tens of pounds in commission, but at the risk of serious jail time!
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06-11-2018, 14:39   #31
geared
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Quote:
Originally Posted by Cyclone View Post
Is it a risk worth taking for the agent? They gain what, maybe tens of pounds in commission, but at the risk of serious jail time!
Common practice at Auctions (of many types) so I don't see why they wouldn't give it a go.

Besides, there's no way for anyone else to know if these bids are real or not if it all go's through one estate agent.
How can you prove they've broken the law?
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06-11-2018, 15:58   #32
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Quote:
Originally Posted by geared View Post

How can you prove they've broken the law?
Lots of ways.

Forged paperwork, a colleague grasses you up, an indiscreet phone conversation being overheard by a manager, a conversation between the vendor and purchaser, complaints from other buyers about similar incidents...........
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06-11-2018, 16:03   #33
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If it's so easy to conceal then how do you know (geared) that it's common practice?
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06-11-2018, 16:33   #34
geared
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Quote:
Originally Posted by Cyclone View Post
If it's so easy to conceal then how do you know (geared) that it's common practice?
What taking bids 'off the wall'??

Everyone knows auctioneers do it.
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07-11-2018, 17:50   #35
bendix
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What laws have been broken? Specifically i mean. I can't think of one.

Let's take the agent out of the scene for a second. What about if I was selling directly to someone, with no agent involved. If I saw that two vendors were really keen and I said that I had already received an offer of £320,000 when i hadn't, simply to get them to start showing their interest at or above that level, would that be against the law?

I don't think so. Noone is forcing the buyers to make any offer at all. They can simply walk away.
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07-11-2018, 18:20   #36
Billy-Jean
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Today my offer of £22k above the asking price for a house was not successful in this sealed bids method. The estate agent phoned me and said your offer at this time was not successful. So i said I will match the highest offer and beat it by £10k. But the agent said sorry but I cannot accept your offer now. Would the vendor be happy? If they knew this?

Sorry don’t agree with sealed bids. Might as well put the house in a auction best and fairest way.

Last edited by Billy-Jean; 07-11-2018 at 18:22. Reason: .....
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08-11-2018, 08:28   #37
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You could of course contact the vendor yourself, you've got the address, pop a note through the door, or send something through the post.

---------- Post added 08-11-2018 at 07:29 ----------

Quote:
Originally Posted by bendix View Post
What laws have been broken? Specifically i mean. I can't think of one.

Let's take the agent out of the scene for a second. What about if I was selling directly to someone, with no agent involved. If I saw that two vendors were really keen and I said that I had already received an offer of £320,000 when i hadn't, simply to get them to start showing their interest at or above that level, would that be against the law?

I don't think so. Noone is forcing the buyers to make any offer at all. They can simply walk away.
Yes, lying to people in a professional capacity to induce a higher offer (or any offer) is fraud and probably obtaining a pecuniary advantage through deception. But fraud is easier to say, right.
It's pretty much the very definition of defrauding someone isn't it, to lie that way.

---------- Post added 08-11-2018 at 07:30 ----------

Quote:
Originally Posted by geared View Post
What taking bids 'off the wall'??

Everyone knows auctioneers do it.
The link you've provided says that it's specifically when the current bid is below the reserve and so no current offer is valid.
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08-11-2018, 11:53   #38
mossdog
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Quote:
Originally Posted by Billy-Jean View Post
Today my offer of £22k above the asking price for a house was not successful in this sealed bids method. The estate agent phoned me and said your offer at this time was not successful. So i said I will match the highest offer and beat it by £10k. But the agent said sorry but I cannot accept your offer now. Would the vendor be happy? If they knew this?

Sorry don’t agree with sealed bids. Might as well put the house in a auction best and fairest way.
........it may be that the agent is selling to one of their pals.........especially if the property needs refurbishing then putting back on the market next springtime.............. How many sealed bids would the seller be aware of if they are not disclosed by the agents!

Last edited by mossdog; 08-11-2018 at 11:57.
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08-11-2018, 21:43   #39
truman
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Quote:
Originally Posted by Billy-Jean View Post
Why it’s unfair is because they will not tell you what the highest bid is. Its final seled bids so if someone has bid £265k and you bid £300k you have paid £35k more for no reason. I would rather the estate agent disclose the best offers. This is why its not fair because its blind bidding
You only bid up to what you're prepared to pay... if you think the house is wortyh 250k then that's what you bid..
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09-11-2018, 09:04   #40
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My parents sold by sealed bid a few years ago. In the space of a fortnight and with 3 interested parties.
Personally I think they've got more if they allowed regular bidding to continue.
Sealed bids work in the favour of the estate agent, they marketed and sold that house in a fortnight, probably charging £1500 - £2000. If it had dragged on for another fortnight that would have just been more work for them.
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