Informal Tender or Sealed Bids - Buyer's Guide - Intro
I am not an expert. But we have recently bid on a property using the Informal Tender or Sealed Bids process, and here are some observations which may be useful to you.
Informal Tender or Sealed Bids - The Property's Price
This is set by the estate agents to generate interest in the property, so it is likley to be below the actual value of the property.
You could complicate things here my trying to work out how much the property is worth. But the really the simple fact is, it is worth whatever you are willing to pay for it.
You don't really like it? - Bid 20% below Price
You really want it? - Bid as much as you can afford.
I did look at some other similar properties nearby and this confirmed my suspicions that the property was under priced. For example if you are looking at a 3 bedroom terrace house for £180,000, and most property that are similar sold recently for £220,000, then this will give you some idea of the level of bid that could be placed.
Informal Tender or Sealed Bids - How are the Bids Decided
Price would be a major factor with the buyer likley accepting the highest offer.
However, if to similar offers are received, then the buyer will likley choose the offer that which does not rely on chains or borrowing.
A chain free cash buyer would be most favourable, although I have read on line that cash buyers are not always the first to be picked.
Informal Tender or Sealed Bids - How to Bid
Ask the estate agent for a Informal Tender form or proforma, for you to fill out. If they do not have one then include the following information in a letter:
- Title - Subject to Contract Informal Tender
- For - The Address of House you wish to Buy
- Your Name (s)
- Your Address & Other Contact Details
- Is your offer and ability to proceed dependant on another property? Yes or No
- If yes give details.
- Level of borrow you anticipate.
- State of agreement regarding borrowing i.e. Agreement in Principal.
- Name of your Solicitors
- Other things you think might be relevant.
Informal Tender or Sealed Bids - When to Bid
You are hopefully delivering a envelope or an email to your estate agents.. . . . . .
If the people run the tender are less than honest then it does not matter when you submit you bid, as the process is rigged.In this instance it may be advantageous to submit your tender at the last minute, so as to give the organiser less time to react.
If the people running the tender are honest, then nobody will see you bid other than the honest organiser and the vendor, so it does not really matter when you submit your bid.
Informal Tender or Sealed Bids - Can You Bid more than Once?
Yes, just submit a revised offer if you think you may have bid too much or too little.
Informal Tender or Sealed Bids - Have You "Won"?
You will normally find out within 1 or 2 weeks after the closing dates for bids. It may be that if you are the second best bidder, and the first best bidder withdraws then you might be in with a chance.