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Sheffield house buying system -Closed bids?

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I’m looking to buy a house next year. My Mum bought a house in Sheffield in the early 80s. According to my Mum the house buying system in Sheffield is some sort of closed bids system and people often end up paying a lot over the advertised price. She thinks this is still the situation.

 

I’ve tried googling this and not turned up any results. Could any kind person tell me if this is still the situation?

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I’m looking to buy a house next year. My Mum bought a house in Sheffield in the early 80s. According to my Mum the house buying system in Sheffield is some sort of closed bids system and people often end up paying a lot over the advertised price. She thinks this is still the situation.

 

I’ve tried googling this and not turned up any results. Could any kind person tell me if this is still the situation?

 

The house buying system in Sheffield is no different to anywhere else!

 

People advertise properties for a price, you go look at them and if you like, you put in an offer. It is either accepted or turned down in which case you either up your offer, wait for the price to come down if it's been on the market a while or you walk away and look at something else.

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I’m looking to buy a house next year. My Mum bought a house in Sheffield in the early 80s. According to my Mum the house buying system in Sheffield is some sort of closed bids system and people often end up paying a lot over the advertised price. She thinks this is still the situation.

 

I’ve tried googling this and not turned up any results. Could any kind person tell me if this is still the situation?

 

Nah mate that’s not the case. Some houses do end up going to sealed bids when there is high demand for a property and the estate agent / seller is trying to get the price up.

 

It’s not the norm though - as top cat said you make your bid for what you think is right - youre not obliged to put in a sealed bid at all.

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Thank you very much. Really helpful.

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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.

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I am currently in this situation. We have seen a house we like offered the full asking price £250k but there was a lot of interest in the property and now its gone to final sealed bids. The last disclosed bid is currently at £260k ....... what do you bid to ???? I don’t like this system of sealed bids I think it’s very unfair I would rather buy from a auction at least that way you know were you stand.

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The skill... as when buying any house... is not to fall in love with it and to try and treat it as dispassionately as you can. It's easier said than done, I get it.

 

But think about it this way... Agents will often try their hand at listing a house higher than what it's really worth... expecting buyers to haggle down (I have never once paid full price for any property, and I've bought 10, edit: 11)... so they will increase it, better for them if they're on a percentage deal. Now, no real issue, you think - because it's just supply-and-demand... if there's plenty of people interested, why not go to sealed bids and offer £10,000 more, £20,000 more?

 

Because you can run into trouble if you need a mortgage and the mortgage company sends round their own Valuer who reports back... "huh, this house is worth £250,000" and the mortgage company says "OK, that's what we're willing to lend on" - not £270,000 - and that can leave the buyer needing to make up the shortfall via an increased deposit.

 

So you need to be careful. Nothing much wrong with supply-and-demand as a concept, but you need to be working the numbers with an objective eye too.

 

---------- Post added 05-11-2018 at 09:29 ----------

 

I think it's a double-edged sword if you realise you've overpaid in a sealed bid too... you'll have the short-term sweet taste of a victory, but potentially the longer-term buyer's remorse... whereas the others who 'lost' will actually have had a lucky escape. I know that I would walk away from such a situation.

Edited by Hippogriff

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I am currently in this situation. We have seen a house we like offered the full asking price £250k but there was a lot of interest in the property and now its gone to final sealed bids. The last disclosed bid is currently at £260k ....... what do you bid to ???? I don’t like this system of sealed bids I think it’s very unfair I would rather buy from a auction at least that way you know were you stand.

 

 

Why is it unfair? The owners own the house and are interested in them getting the best possible price. The agents are paid by the owners.

 

If you want the house, then you should bid the absolute maximum you are prepared to pay for it - if you don't, then offer less. Either might win or lose - it's just the way it is.

 

I don't see how that is unfair. You want an asset someone else owns and it's in their vested interest that you make the largest offer you are prepared to make.

 

 

Full disclusre: I bought my place by sealed bid. The largest offer with a couple of hours to go was £317500. I thought sod it and offered £320000. I could have gone up £500, but i wanted the place and wasn't prepared to lose it for less than 1% of the price.

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Full disclusre: I bought my place by sealed bid. The largest offer with a couple of hours to go was £317500. I thought sod it and offered £320000. I could have gone up £500, but i wanted the place and wasn't prepared to lose it for less than 1% of the price.

 

No problem. If you're willing... what was the original list / asking price when it was advertised for people to see? Was it £300,000, £310,000, £320,000? You usually imagine it's less than the offers going on, for obvious reasons... if you purchase over the asking price (which is often based on at least some kind of cursory valuation - Estate Agent type) then as long as you realise you're then effectively straight into negative equity it's no problem... that's no special kind of problem if it's your forever home anyway... only if you plan to realise the money in the bricks and mortar at some point... oh, and if you need a mortgage and the amount it's gone over by is just a daft number (which it could be).

 

---------- Post added 05-11-2018 at 10:20 ----------

 

You're right that it's not unfair, though. Everyone is playing by the same rules (you hope).

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Why is it unfair? The owners own the house and are interested in them getting the best possible price. The agents are paid by the owners.

 

 

I agree.

 

This is no different to bidding for a desirable item on eBay. More people will be interested and therefore a higher price will need to be paid to secure the item.

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I agree.

 

This is no different to bidding for a desirable item on eBay. More people will be interested and therefore a higher price will need to be paid to secure the item.

 

Not disagreeing strongly, but sealed bids are generally perceived as being good for the Seller, whereas eBay's public / transparent bidding system is generally perceived as being good for the Buyer... so definitely different.

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Not disagreeing strongly, but sealed bids are generally perceived as being good for the Seller, whereas eBay's public / transparent bidding system is generally perceived as being good for the Buyer... so definitely different.

 

What is the difference between a sealed bid and a maximum bid on eBay?

 

Both are hidden from other buyers and I'm sure that we've all paid more than we planned for something on eBay by upping the maximum bid to ensure that we got the item.

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