Adam says:
"In Battersea and Clapham, prices of houses and flats have risen 15% - 20% since January and the market shows little sign of slowing down. A flat in Clapham recently had 17 viewings in two hours. Buyers are being scared into making rash decisions because they can see the market rising as they watch. It's more like being a commodity trader than a property buyer.
Buyers frequently have 15 or 20 minutes to make a decision. They rarely have the luxury of being able to revisit a property, or even sleep on a decision overnight. In the panic, buyers are losing property they want, or paying over the odds to secure it. Estate agents are adding to the panic by saying that if buyers don't buy quickly, they'll be priced out of the market.
As buying agents, the emphasis of our job description used to be about short listing properties; now it's more focused on obtaining them.
Successful buying is all about knowing the market inside out, and being at the right place at the right time.
When a new property comes onto the market, it's essential to understand its true value, and that can only be done by accumulating a broad market knowledge on a day-in, day-out basis - what's sold, what it's sold for, and what hasn't sold. Comparables are everything. As soon as a property exchanges at a particular price, that's another line in the sand.
An appreciation of pricing structure is also vital. Some agents overvalue, so property will come onto the market at as much as 20% more than it's likely to sell for. An uninitiated buyer may be persuaded to pay that price simply to secure a property when they've failed to secure others in the past.
Being the first to know about new properties also helps, although being first into a property is no guarantee of being able to secure it. Buyers are dropping everything at work to rush to view new properties.
Good relationships with agents means that we often see property before it's officially launched. This gives us a chance to assess it and its likely value. It's a bit of breathing space allowing us to assess, compare and be decisive. We recently went straight in at the asking price for a client before anyone else saw it. By wrapping the offer up in a way that would look most attractive to the vendor we were able to secure the property for the client.
The shortage of London stock is sparking off a rash of sealed bid scenarios, a device used by agents when demand significantly exceeds supply. Sealed bids invariably produce a feeling of despair in a buyer's heart."
Property Reporter has put together a list of things to do when approaching a sealed bid situation:
- Read the 'rules' that will be issued by the estate agent carefully, and adhere to them
- Try and get the vendor to accept an offer before it goes to sealed bids
- Your bid needs to be the top price you would be comfortable paying. Base it on this, rather than on what you think you need to pay to secure the property.
- The bid itself is important, but equally important is the dressing of your offer, demonstrating your commitment, proceedability, ability to exchange quickly, flexibility of terms. Your bid won't only be judged on the amount; it will also be judged on how easy you're going to make it for the vendor. The more information you have about the vendor, their motivation and needs, the better, then tailor your presentation to fit.
- Get a survey done before the date for sealed bids, so your offer doesn't have to be subject to survey. Again, this will make your bid very attractive.
- Attach a list of advisors (solicitors, finance providers etc) which will further reassure the vendor;
- Quiz and badger the agent to get information. It helps to know how many other bidders there are, where they come from, what else they've been looking at. Agents cannot discuss bids — but they can reveal how many bidders there are, and what offers were made before the auction. All this may help you assess how the bids are likely to turn out
- Don't miss the deadline, but equally, don't get it in too early. We recommend driving your offer to the agents office just before the deadline, obtain a receipt and if possible sit there while they open it
- You will be at an advantage if you're using a buying agent. Buyers who use an agent to represent them will already have parted with a retainer, so vendors and estate agents know they are definitely serious. They also realise that the deal is more likely to reach completion, because the search agent will be overseeing everything for his client.
- Don't expect an immediate result - you may well not hear the outcome for three or four days, so spare yourself the pacing and stressing.
