How To Choose a Buyer in a Property Bidding War
In a high-demand property market, particularly for property sales in West Sussex, where buyers outstrip sellers many times over, it can be very difficult to gauge competing offers.
Selecting your preferred bidder may be easier if there is a significant price differential. Still, other factors might make Tod Anstee more inclined to recommend one buyer over another based on your priorities.
Evaluating the strength of competing bids is not always based on pricing and can be influenced by whether or not a prospective buyer is part of a chain or whether they are buying a home to live in or rent out, for example.
Why Do Property Bidding Wars Occur?
There are multiple ways you might approach a property sale, particularly if you are selling a high-valued home, a residence in a unique location, or a plot that is likely to attract high levels of competition – such as a home with generous grounds and a mooring berth with river views.
Property bidding wars can happen whenever more than one buyer wants to make an offer or is open to increasing their bid to secure the property over another bidder.
You may also find yourself torn between offers where you approach a property sale with closed or sealed bids, whereby each buyer needs to submit their final proposal without knowing what other bidders have bid.
The prevalence of bidding wars is higher in West Sussex than in many other locations because demand for quality homes in semi-rural areas is far higher than availability; therefore, many properties command a significant price premium linked to scarcity and exclusivity.
How to Choose a Buyer for Your Property
Our team works closely with every buyer to establish preferences and priorities, which helps us inform interested parties of what they would likely need to offer to be successful or advise when existing bids have already far exceeded the listing price.
You may wish to select your buyer based on one or several variables, such as:
- The highest offer
- Cash buyers
- Buyers in a property chain
- Bidders with an existing mortgage agreement in principle
- Residents, as opposed to landlords or developers
Some homeowners are reluctant to sell to developers or landlords, primarily because they are selling a much-loved family home and would prefer to see it retained as a residence rather than potentially being replaced with apartments or a commercial building.
Others prefer a specific buyer demographic, such as a family that will preserve treehouses or other features of sentimental value.
However, you can also be very practical and discount a higher bid if the sale is likely to take several weeks or months to complete due to a lengthy chain, complex circumstances or other factors.
What to Look for in a Strong Property Purchase Bid
Serious buyers will often be prepared to offer assurances as to their status in terms of being ready to proceed quickly, having funds available or a mortgage agreement in principle, and providing a clear timeline to help you plan for your onward move or purchase.
Reliability and good communications are indicators that a buyer is keen to get the ball rolling and is committed to a smooth transaction.
We usually advise against considering late bids purely because this could signify that the ongoing transaction would also be subject to uncertain timescales.
However, in some scenarios, you might find that a late offer surpasses all previous bids, and provided the last highest offer has not been accepted, you may be able to secure a more advantageous sale value.
Another factor is to look out for contingencies – buyers often submit offers with caveats, such as that their offer stands on the assumption that they will secure sufficient financing from their mortgage provider.
Some contingency clauses are standard, such as being subject to a property valuation, but if you have a home for sale in superb condition and have already completed an independent valuation to support your listing price, this may be unnecessary,
Bidders without contingent clauses and with pre-approved financing or proof of funds that can move quickly are usually preferable.
Selecting a Bidder From a Sealed Bids Property Sale
Sealed bids are more likely where a home is of a high value, and the buyer does not wish to invest time in property viewings and negotiations. Please contact Tod Anstee if you are interested in this form of sale, and we will be happy to discuss the pros and cons.
Selecting a successful buyer in these circumstances can be more straightforward, and you may specify criteria for each offer to be considered.
Another element to look for is an escalation clause, used when a bidder is very serious about buying a property and is happy to increase their offer as required to ensure they bid higher than the competition.
Escalation clauses are an addendum to a purchase offer, which sets a specific amount or percentage that the buyer is prepared to go up to, usually with a fixed upper cap.
Even if you are satisfied that the offered price is the highest possible value and higher than all other bids, these additional signs that a buyer is invested in purchasing your home are a good sign that they are fully committed.
Expert Advice for West Sussex Property Sellers
As we have seen, multiple factors might determine which offer you select when you find your property the subject of a property bidding war.
While this is an excellent opportunity to maximise the sale value of your property, you may wish to accept a slightly lower offer in return for convenience, a faster transaction and a reliable buyer who is unlikely to pull out at the last minute.
The Tod Anstee sales team has years of expertise in marketing, managing and negotiating property sales, and is always on hand to advise if you are unsure which offer presents the best option.
When we manage a listing on behalf of our clients, we can also assess each prospective buyer to determine which bidder best suits your requirements and preferences.
Please get in touch if you would like any further advice about property bidding wars – whichever side of the transaction you may be on!