Sealed bids.

Sealed bidding sometimes occurs when there's been a lot of interest in a property and is a good - if nerve wracking - way to settle a sale.

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Auctioning by sealed bidding tends to be a method suggested when there's a lot of interest in a property. If you have more than one party wanting to buy your home then this method could be for you.  However a lot of people are put off by the 'cloak and dagger' nature of the process - it's not an open matter like a conventional auction where bids occur until the hammer comes down, and - confusingly - it's not always the highest bidder that wins!  Rather than an auctioneer acknowledging the sheer numbers it's the vendor who decides the winner, based entirely on their own criteria. Matters such as how quickly a prospective purchaser can complete weigh as heavily in the decision making as the actual amount bid. Someone offering a lower sum but who actually has the money sitting in their account right now is more likely to win favour with the seller that a high bidder who hasn't even started the process of arranging a mortgage.  

This is why it's important for people interested in buying a property that's being sold by this method to make sure their bid contains more than just the number of pounds they are willing to pay. The bidding process is an opportunity for the potential buyer to sell themselves and their situation to the vendor. We're not talking about sob-stories of why they should have the house, but making a good solid case for why the vendor should choose them. 

Generally the way the sealed bid auction process works is that the property is advertised at a guide price and bids are invited to be placed in writing by interested parties before a specified cut-off date.  Once this date is reached the submissions are examined by the seller and a decision is made. However unlike a conventional auction no contract is created by the acceptance of a bid and the hammer coming down - the sale still proceeds just the same as any other property sale, with either party being able to change their mind and derail the process before contracts are exchanged.  

All of this might - quite understandably - leave most potential buyers asking 'what's the point then?' That's a pertinent question: The answer is that it helps the seller, not the buyer.  It's potentially a nail-biting and worrisome process for the buyer, wondering if the price they offered was good enough, and if they made their case clearly enough in their offer letter.  What it does for the seller is allows them to see all the serious potential buyers' cards at once, and therefore make a fully-informed decision.

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