The UK’s largest property auctioneer – operating as Loveitts
Auction House in Coventry and Warwickshire - says the increased success of
auction could help bring about the end of sealed bids, or ‘best-and-final
offers’, as they are sometimes known.
Sealed bids usually come into play where there is significant
interest in a particular property, and so potential buyers are invited to
submit their offer to an estate agent before a pre-agreed deadline, without
knowing the size of any other offers being put forward.
Sally
Smith, Auctioneer and Director said: “The simple
truth is that sealed bids do a massive disservice to the seller by failing to
achieve what could be raised in the competitive environment of an auction room.
“Random
single offers in envelopes are rarely likely to reach the heights of figures
obtained in an open and transparent bidding process, where a talented
auctioneer can ensure that the best price for the property can be achieved. Not
only that, unless you’re buying in Scotland, sealed bids are not legally binding
and either party can pull out of the deal at any time.
“By
contrast, when the hammer falls in an auction room, it represents a
binding exchange of contract between the two parties. So, if you’re a seller
thinking about using the ‘best-and-final offers’ option with an estate agent,
our advice is to consider auction instead.”
Sally’s
comments come after the release of the latest Auction House figures, which
indicate the group raised its highest September total ever (£85,586,151), as
well as recording its best year ever for the total raised during Q1-Q3 (£449,733,079)
– which itself was more than £120m above its previous best total in 2018.
She
explained: “It’s been an astonishing year for us. In fact, we’ve raised more in
the first three quarters of this year, than we’ve raised in an entire 12 months
in the past. There’s no doubt that for the first time in the group’s 14-year
history, we’re going to hit the half a billion pound milestone by the end of
the year.
“This is
accompanied by a sharp increase in the average price of our sales, which have
jumped by more than a third (34%) from £126,558 over the past five years to
£170,353 now.
“This
reflects the fact that auctions are appealing to a bigger section of the buying
public – not only those who want to invest and trade, but also those who want
to buy properties to live in. In other words, not just buy-to-let, but also
buy-to-live.”
In
September Auction House sold 463 properties from 559 offered – an impressive success
rate of 82.8% and raised a total of £85,586,151. This means that in the year to
date, the group has sold 2640 properties from 3186 offered – with a similar
success rate of 82.9%, and raised a total of £449,733,079.
Sally
Smith added: “It looks like the English property market is starting to catch up
with the Australian one, where the majority of properties are sold by auction.
But before that happens, it seems clear that canny vendors will wish for their
properties to be sold by auction instead of best-and-final offers. My sincere
hope is that this will sound the deal knell for sealed bids, and they become a
thing of the past.”
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