If you aren’t competing, via a bidding war, on a property right now, my first thought would be, what’s wrong with it! Okay, not all UK property is sought after but whilst supply remains low and demand high, prepare to partake in a bidding war, as opposed not.  Today’s overheated market is the byproduct of the pandemic. Buyers are desperate for change and greener pastures, whilst the stamp duty holiday has incentivised others to move. Keen to cash in on the ‘perceived’ saving. Whatever the reason, whether you are traversing the ladder or taking your first tentative steps on to it, here is a guide to mastering a bidding war.

What is a bidding war?

This is when there are two or more buyers competing for ownership over a property. They will then be pitted against each other, by an agent, to get them to go as high as possible. Eventually they will be asked to put their best and final offer forward by the agent. This can sometimes be a sealed bid – when an offer is put in writing by an agreed date and time to the agent. The idea of this is to create a level playing field between all vying parties.

How to win a bidding war?

Get organised.

Make sure you have a solicitor, signed up, a mortgage agreed in principle and proof of funds. Without these, you look unprepared and some would question your commitment.   

Wax lyrical.

Explain what you like about the house, how it makes you feel and what you look forward to in the future. (Bringing up kids, not having room to put up kids etc…)

Be a detective.

Before you’ve even seen the property get as much information as you can on the sellers motivations for moving, their timescales, where they are heading etc. This information will prove invaluable when framing your offer letter to the seller.

Time scales.

Demonstrate your commitment with either a deposit or desire for a quick exchange. This way both parties feel secure that they are moving. In some cases, to avoid being gazumped – when another buyer offers higher than the amount agreed mid conveyancing. You may want to protect yourself by getting your solicitor to negotiate an exclusivity/lock-out deposit or option agreement. These all give the buyer a certain amount of time to perform in, without the threat of another party entering the fray. Alternatively, they can be used to protect both parties. So, should either side back out before exchange, whoever isn’t to blame pockets the deposit money. None of these are water tight but they may help provide a little peace of mind.

How to survive a bidding war?

• Be prepared to walk away.
• Be prepared to lose it.
• Be prepared to put forward an offer that will enable you to sleep at night.

Meaning, don’t put forward something you can’t afford or regret not offering more, having lost it.

 

Who knows how long this market will continue like this but whilst it is, remember there is always another property out there.