Sellers looking for the highest price combined with buyers trying to secure the perfect property have led to the return of high pressure tactics, such as the mass viewing, sealed best bids and gazumping, where a seller accepts a higher bid after already having accepted another.
‘Fierce competition that was until recently confined to prime central London locations has now spread throughout the City and the South East and with it the nasty practices not seen for a number of years,’ said Saskia Arthur, a partner in Boodle Hatfield’s residential property team.
These include Saturday morning open days which instil a sense of panic and intense competition, as potential buyers are rushed round the most popular properties along with numerous other interested parties.
‘I’ve heard of one prospective buyer being shown around a two bedroom house in South West London, ripe for re-development, with 30 other interested parties in the space of just 20 minutes, explained Arthur.
‘There is then an expectation that initial offers must be submitted by Monday morning at the latest, with final offers being requested just a few days later,’ she said, adding that gazumping is also on the increase and there is very little that can be done to prevent it.
‘Whilst agents may push exclusivity agreements with large non-refundable deposits, these do not legally bind the parties to actually exchange contracts. Once the exclusivity period closes the seller can still walk away, but should have to return the deposit. The cost of litigation also prohibits most people making a claim,’ she pointed out.
A buyer can, however, take practical steps when it comes to sealed bids. Advice includes finding out from the agent exactly what is required by the seller and including a covering letter with a bid that tells the seller why this property is right for you as it is not always the highest bid that wins.
Other tactics include stressing flexibility in timing for completion as whilst many want a quick exchange, sellers may want to delay completion to coincide with school terms or work commitments, delivering a bid to the agents just before the allotted time and having any mortgage requirements and surveyors, solicitors and any other advisers all lined up and ready to move.
‘London and much of the South East is a sellers market. Buyers need to understand the market, and some of the more unpleasant tactics that have once again returned, to give themselves the best possible chance of securing the home they want,’ added Arthur.
