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Sheffield house buying system -Closed bids?

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OK, you want an argument, I'll duck out now... ;) same old Sheffield Forum.

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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.

 

The difference is the highest bid someone is prepared to pay in sealed bids is the price paid. So there may be three bids of 300k, 302k and 320k. The buyer has committed to pay 320k - or 18k above the second highest bid.

 

That's not how eBay works. The price increases incrementally - so the top bidder will only pay slightly higher than the next highest bidder whatever happens.

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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).

 

 

I don't understand your point about going straight into negative equity.

 

In high demand areas, places are rarely advertised as an 'asking price' because agents know that a shortage of stock and a lot of demand means prices can move quickly. For mine, the guide price was £300-£320k.

 

At worse, I paid £2000 more than the last known bid, but I'm told there was antother bid on it for the same £320k I paid, but the vendor accepted my bid as I had no house to sell, and wasnt relying on a mortage.

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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.

 

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.

 

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

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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

 

Yes but as with anything the house is worth what people are willing to pay for it.

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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.

 

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 +

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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

 

 

That's not true. They do tell you what the current highest bid is at certain intervals, the last of which is usually a couple of hours before deadline. When I bought mine i was told it was £317500. That was a couple of hours before deadline. I then offered £320,000.

 

However, they told every intersted bidder that at the same time. What they can't do is engage with you individually on an ongoing basis and tell you if your new offer has been superceded already, or give you a private running commentary. And why should they? The agent acts for and is paid by the seller. As such it is in their interests to encourage you to make the highest offer you are willing to make so the vendor gets the best price.

 

Your offer is what YOU are prepared to pay, otherwise you would'nt offer it. Your offer should not be a reflection of what you think everyone else is offering. It is what the house is worth to YOU.

 

I fail to see how that is unfair. Noone is making you make an offer.

 

---------- Post added 05-11-2018 at 15:29 ----------

 

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 +

 

 

There really isn't you know. The seller wants the highest price.

 

You offered £300,000 because you were happy to pay £300,000. Ipso facto, the house is worth £300,000, NOT the £265,000 of your rival's failed bid.

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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.

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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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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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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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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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