Whats a sealed bid scale?

[Property Meister]

whats this all about? ive never seen it

http://www.domain.com.au/Property/F...ver=Emails&s_cid=HomeAlert:VIC&haprof=1577463

or am I that out of touch!

 

[buzzlightyear]

Everyone's submit one bid to the agent inclusive of price and any other conditions. The best price wins (usually). Sealed bid, tender terms are somewhat interchangeable. It not very common as you allueded to for residential property. More common in commercial.

Personally I never liked them because the lack of transperancy from my end (ie bidder).

Back in 2005, there was a 3 br house in Sth Melbourne that was being sold, had a similar process. Agent said give us your best price. I did. He rang me back afterwards hinting that I should offer more and if that was my absolute best offer. I didn't get a good vibe about the process. But maybe that was because of the person running the process, not the process itself.

 

[Property Meister]

thanks buzz.

so do they normally choose the highest price or do they just sit around the table taking into cosnideration settlement period, and other conditions?

I guess having all the offers in front of you from a sellers perspective would be good so you can choose which ones you can negotiate with.

and from the vibe, I get the hint its NOT an urgent sale

 

[kathryn d]

thanks buzz.

so do they normally choose the highest price or do they just sit around the table taking into cosnideration settlement period, and other conditions?

I guess having all the offers in front of you from a sellers perspective would be good so you can choose which ones you can negotiate with.

and from the vibe, I get the hint its NOT an urgent sale

I would imagine the conditions would be justas important as the price.
As a buyer, I wouldn't like to buy this way. You are leaving the offer on the table too long.

 

[chilliblue]

This is normal practise overseas and the say that it is the fairest way of buying property.

Essentially every buyer places their best bid forward and the agent/legal advisor chooses the "accepted buyer" and goes forward on that choice.

No negotiating between parties.

Always review the terms and conditions and ensure that you follow them.

 

[mary&mat]

I don't 'get' this process either.

To me, it seems that all the power is in the vendor's hands & I'm forced to show them all my cards. At least at an auction I can see what's happening around me & what the other bidders are doing.

I don't think I'd ever like to have to deal with this.

 

[CaptainObvious]

yes, however, at an auction you risk emotional bidders ...dont you?

 

[Ms Jade]

Definitely good for the vendor as the process is not transparent & the idea is that everyone puts in their top price. Of course, this only works when the property is highly desirable IMO & the buyers will bid to a max amount to secure it. Dunno that this property is likely to fall into that category...

If it's really not an urgent sale, I guess this would also be useful if the vendor was not really serious about selling but 'testing the market.' If they get a high enough price (a.k.a. 'more than the property is really worth') they may sell it & this puts a time limit on the process.

 

[mary&mat]

yes, however, at an auction you risk emotional bidders ...dont you?

I think this process may also prompt emotional bidding, especially for a PPOR & someone 'really not wanting to miss out'

 

[jlamba]

My opinion: A good method to sell but not to buy.

A combination of agent pitch and pressure of no negotiating between parties suggests that you will raise your bid in order to secure the property.

Like mary&mat have stated at least at an auction you have an extra sense at an auction. If the property gets passed in it gives the buyer a little more control where the vendor perhaps lowers the mark a little.

 

[marg4000]

Neighbours nearby sold by tender with a specific end date.

At least 10 days before the end date the RE agent rang to say they had a very good offer submitted, they talked that purchaser up another $10K to seal the deal on that day.
Marg

 

[BuildingBlocks]

Terrible way of buying, there is one agent I know who seem to do only this type of sale. The majority of properties that they have offered in this format have failed to sell and they have reverted to fixed pricing.

If you are interested in a property and don't want to go through this madness then I would put your offer in writing and set an expiry of within 24hrs, also advising that you will not be taking part in their silent auction.

The agent has the responsibility to present all offers to the vendor, even if they do not abide by their special sale method.

 

[Giddyup]

No negotiating between parties.

Who says that?? They can come back to you, tell you that you are the highest bidder, but the vendor still need a bit more to make him sell.

No transparency and a complete crock. This is the only REA in Melbourne that I have seen regularly using this trick... and normally their properties sit on the market for a while.

 

[jrc77]

From what I see on TV it's the standard way to buy/sell property in Scotland.

Jason

 

[skippyz]

Old thread but I have a question about this sealed bid and hope someone (hopefully agent) can answer.
Is it acceptable to provide my own price with minimum and max bid price with increment condition?

for example, in this sealed bid, my offer is
1. $300,000

Condition;
a. If any other bidder offer exceeds our offered price, please override my offer of 1. above with $1,000 more than the highest bid until my offer reaches $360,000 (absolute maximum).
blah blah blah

I understand normally sealed bid is offered to selected numbers of potential buyers.
Is this kind of conditional amount acceptable?

I have done sealed bid twice. Once won (as our PPOR), once lost by $15,000.
- of course without this kind of conditional amount. Both were just simple amount offer only.

 

[Freckle]

Old thread but I have a question about this sealed bid and hope someone (hopefully agent) can answer.
Is it acceptable to provide my own price with minimum and max bid price with increment condition?

for example, in this sealed bid, my offer is
1. $300,000

Condition;
a. If any other bidder offer exceeds our offered price, please override my offer of 1. above with $1,000 more than the highest bid until my offer reaches $360,000 (absolute maximum).
blah blah blah

I understand normally sealed bid is offered to selected numbers of potential buyers.
Is this kind of conditional amount acceptable?

I have done sealed bid twice. Once won (as our PPOR), once lost by $15,000.
- of course without this kind of conditional amount. Both were just simple amount offer only.

You leave yourself exposed to a dummy bid that takes you up to your max. Legally it could messy if a challenge was later placed contesting anything. Unlikely to be allowed because of this.

You are better off to offer a set amount and offset financial aspects through the use of conditions. For example you might offer $XXXX with a bonus of $XXXX if it was structured as an option.

There's no limit to the conditions you could offer that could have financial implications.