How does one know what figure to offer in a sealed bid
If a flat is on the market for £450 with a lot of interest and the invitation to make a sealed bid how does one know how much to offer
Asked on Apr 23 2015,
House Prices in Brighton |
You've got to give more information on the property for a full answer!
Jonathan Rolande :-)
Answered on Apr 27 2015,
How badly do you want it?
1. You cannot bid more than you can afford no matter how much you want it.
2a. If you bid less than you could afford you may not get it.
2b. If you bid less than you could afford you may be pleased with the bargain.
3a. Who else is bidding and how much do you think they can afford?
3a Who else is bidding and how badly do you think they want it?.
4. What else could you buy with the money?
5. How easily (and soon) could you find something as good and at what price?
Work out your budget. What you can afford, less all the costs of moving and the costs of any work you consider necessary on the property. That is the maximum you can sensibly bid.
Take into account the cost of having to wait for the next opportunity if you lose this one.
If there is an open house with several buyers around you get
a chance to size up the opposition. Do they look like cash buyers? Are you a cash buyer?
For an initial offer, knowing there are likely to be other bids, a little over asking price will do to indicate interest. But when it comes to the sealed bid stage you only have one chance. You really need to be a cash buyer. You certainly need financing in place and cash deposit. Expect to pay at least 2% over asking price. If you are not a cash buyer a bid of more than 5% over asking price will probably not be plausible. If you are determined to have it is it really worth (to you alone) +10%?
Answered on Apr 28 2015,
Firstly, don't enter a sealed bid unless you absolutely have to. Depending on your relationship with the agent and the way in which he sees you as a serious buyer, you may be able to buy the property without the sealed bid taking place at all. Why not get someone independent such as Indigo12.co.uk to help you find out the real reason there is a sealed bid. Is it just so the seller can take a swift profit? Or because the agent does not really know what the property is worth? You can always get lots of information on house buying negotiating techniques from the FREE report on my website or email info@Indigo12.co.uk and ask Mary for the report.
Answered on Apr 30 2015,
Supplement to my previous answer.
Is this a case where several potential buyers have appeared by chance or has the property been priced to sell with the intention of generating interest and a sale within days?
In the first case, the asking price is likely to be about right for the market. The mortgage valuation will be the same no matter how keen someone is to have it and most buyers are likely to need a mortgage. So any extra will have to come from the buyer rather than their mortgage. An extra 2–5k could be enough, you would need to be very determined and cash rich to offer more than +2.5%.
If it has been priced to sell, and most likely an estate sale the position may be different. The guide price will reflect a 'book' value, likely based on potential investment return. The market value could be well above that. In which case you probably need to be a cash buyer prepared to offer rather more.
Answered on May 4 2015,
Didn't find what you were looking for? Ask a question
More House Prices in Brighton questions on AskMe
See more AskMe Q&A about House Prices