Q. I have recently viewed the most perfect property and made what I think is a reasonable offer. However the agent tells me that there are two other interested parties that have also submitted offers. The problem is apparently the seller is going to make a decision tomorrow but the decision will be based on who the best buyer is out of the three of us, so it’s not necessarily going to be the buyer with the highest bid that will secure the property. Isn’t this a bit unfair? Surely the property should go to the buyer that is willing to pay the highest price?
A. In most cases a sale would usually be agreed to the buyer that will pay the most money and typically in your case with three people bidding the agent would normally suggest to their seller that the property should go to sealed bids, this way whoever submits the highest offer will secure the property. However, some sellers are more concerned about the strength and position of the buyer rather than gaining a few extra pounds. He may be in a chain for instance that has previously broken down because of his buyer losing their buyer, this would likely result in him insisting that his next buyer is not in a chain – chain free to prevent the same scenario occurring again. Or it could be that he wants a cash buyer, that way he would be more confident that the sale would not be subject to a survey and finance being secured. You would be surprised how many sales fall through because either the property was down valued by the surveyor or and especially in these troubled times the lender decided not to lend on the property. All of these things would not be clear until quite a few weeks into the transaction losing valuable time for a Vendor that was desperate to secure a new home himself. Cutting down the risks is not uncommon amongst sellers, especially if they have already lost a buyer previously, understandably they would prefer to cut down the uncertainties to a bare minimum. My advice to any buyer out there is put yourself in the strongest position you can. Make sure your lease on your rental flat hasn’t got another 6 months to run so that you will delay completing on that perfect property, go and see a financial advisor now and find out how much you can afford to lend and have them provide you with an AIP (an Agreement in Principle) before you even so much as glance at property on the internet, sellers will often ask their agent to see a copy of the AIP to see that you have your finances in place. Make sure you have a decent deposit that is easily accessible and isn’t going to take you months to access. Don’t be shy to tell the agent when you register that you have all these things in place and let them know what percentage deposit you have to put down against a potential purchase.