KFH - sealed bids on property sales - a word of warning

[hoipolloi]

We are looking to move house. We saw one last weekend we were very interested in and were told by the agents (KFH) that as there was a lot of interest and multiple offers it would go to sealed bids. They sent a letter out setting out the sealed bids process, which required all bids to be submitted by a particular time and date. We put our offer in. We were notified by the agent the next day that it had been accepted. We were then telephoned today by the agent to say that one of the unsuccessful bidders had become "very cross" on learning that he had been unsuccessful and had made a higher offer which the agent was "legally obliged" to put to the seller, and the seller has decided to accept.

So, gazumping is apparently ok again. Please be warned that if you enter into a sealed bid process with KFH you cannot assume that it will be honoured.

[red devil]

Estate agents are right to say they are legally obliged to pass on bids, but there's nothing to stop an estate agent drawing up a contract with their clients, agreeing that they won't pass on bids after a property has gone under offer, thus removing the threat of gazumping. They can do it, they just choose not to...

[hoipolloi]

Precisely. You might as well not have the sealed bids process at all if the agent isn't going to honour it.

[ratty]

Have to say that Bushells agreed with us once we had accepted that they would not entertain further bids. In fact they gave us the options to or not. We chose not.

[red devil]

ratty Wrote:

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> Have to say that Bushells agreed with us once we

> had accepted that they would not entertain further

> bids. In fact they gave us the options to or not.

> We chose not.

That's good. Would be even better if they said no gazumping, period. Did they make potential purchasers aware of what you had agreed to, was it mentioned on the property details?...

[????]

KFH - Utter Scumbags basically. Lowest among a fairly low lot*

*some exceptions

[ianr]

> Please be warned that if you enter into a sealed bid process with KFH you cannot assume that it will be honoured.

TThat seems to be a possibility whover the agent, if this article is accurate: http://www.in-deed.net/conveyancing/conveyancing-articles/sealed-bid-auctions-how-to-successfully-bid-on-your-dream-property.

We also don't know what the letter from KFH actually said.

[hoipolloi]

I can only comment on my experience - which was of KFH. They may legally be entitled to do this, my point is that you would be reasonably entitled to assume that "best and FINAL offers" means exactly that. Otherwise the process is pointless.

[northdulmum]

I recently won a sealed bids process and was gazumped two hours later

Bidding war ensued

thankfully we won, so we're just a bit poorer

I don't really care. it's the way of the world these days.

I don't blame the agent. Or the seller for that matter.

If you love the house, you have to fight for it.

I'm really happy we won and grateful we could raise the money to win the bidding war.

[KidKruger]

Complaining about estate agents not honouring 'agreements' is like getting upset when your dealer promises to be at the back of the pub at 9pm but doesn't turn-up, or says you'll get a half ounce of decent sensi which turns out to be just regular commercial weed.

They're predominantly unreliable, inconsistent and unbestowed of integrity.

We all know this already before we engage them.

Of course, there are occasional examples of someone doing what they say they will, but that can happen in any field, whether estate agent or drug dealer.

[DaveR]

"Estate agents are right to say they are legally obliged to pass on bids, but there's nothing to stop an estate agent drawing up a contract with their clients, agreeing that they won't pass on bids after a property has gone under offer, thus removing the threat of gazumping. They can do it, they just choose not to..."

This is correct (although to be really pedantic you don't need a contract between seller and agent, just an unambiguous instruction). In an ideal world, all agents would advise sellers that 'best and final' should mean just that, and if the seller doesn't agree then all potential buyers should be told that it is not really sealed bid but an ongoing auction. To be fair to KFH this isn't established practice by any means.

[hoipolloi]

I didn't enagage them. Unfortunately it just happened to be them selling this house. My preference would be not to deal with agents at all but that isn't necessarily an option. I know I shouldn't be surprised really - doesn't stop me thinking it's all wrong and wanting to put other people on notice - from recent experience it seems that there are a lot of properties going to sealed bids at the moment.

[strae]

Not to be unsympathethic, but isn't the issue here that conveyancing actually happens a long time after initial offer and acceptance in the UK. For every story of gazumping, there is probably another of so-called cash buyers who turn out to rich in gumption but poor in funds, or buyers who change their mind when a better house gets listed etc...

Nothing means anything until exchange. And since for most transactions that is a good few months from the initial frenzied bid-offer, buyers are exposed in rising markets and sellers are exposed in falling markets.

There was a call to reform this a while back during the previous boom in 2008 and it died a slow lingering death of 1,000 apathetic cuts. Property owners could care less when prices are going up.

In other markets, buyers need to be fully financed before submitting an offer (i.e. letter from bank stating ability to proceed etc) and sellers need to have a fully vetted info pack with all attendant representations (i.e. all planning permissions in place, all regulations complied with, all risks disclosed) so at the point that a buyer makes an offer and the seller agrees - the deed is done.

Given the experience of 2008 (where agents and owners railed against even reduced scope HIPs), I think this is realistically never going to change in the UK. Makes the whole process rather stressful, but it seems that this is what people prefer....

And paradoxically, the euphoria of emerging from the gauntlet having successfully completed probably adds to the willingness to both do it again and perpetrate it unto others...

[red devil]

The Scottish system for buying/selling is different strae. I believe they operate a sealed bid process, therefore no gazumping. Offers are legally binding much earlier than the English system, thereby you have to be serious about buying, because if the buyer subsequently pulls out they will incur costs, whereas in England half hearted buyers can pull out much later incurring little costs...

[LondonMix]

I think that's what strae was saying. That its the system rather than the individual agents, sellers or buyers that is flawed... I tend to agree

[red devil]

LondonMix Wrote:

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> I think that's what strae was saying. That its

> the system rather than the individual agents,

> sellers or buyers that is flawed... I tend to

> agree

strae referred to the UK, it's not a UK wide problem...

[newboots]

Extremely shabby behaviour. House buying and selling really does bring out the worst in people.

[simonethebeaver]

To be fair, it's the sellers to blame, not KFH. Until exchange of contracts any sale can be renegotiated or fall through. They ARE legally obliged to pass on offers, as are all agents, and can't unilaterally agree that a sale price has been reached. They perhaps should have made it clearer that a final bid might not be final but that's the vendor's decision, not theirs.

[lane lover]

Estate Agents are the lowest form of living creature.

http://uncyclopedia.wikia.com/wiki/Estate_Agent

[strae]

red devil Wrote:

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> LondonMix Wrote:

> --------------------------------------------------

> -----

> > I think that's what strae was saying. That its

> > the system rather than the individual agents,

> > sellers or buyers that is flawed... I tend to

> > agree

>

> strae referred to the UK, it's not a UK wide

> problem...

My apologies - and thank you for pointing that out. Quite topical given current discussions re Scottish independence...

[strae]

lane lover Wrote:

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> Estate Agents are the lowest form of living

> creature.

>

> http://uncyclopedia.wikia.com/wiki/Estate_Agent

They do have a bad reputation, some of which is deserved.

I think the fact that it is a role that is potentially very lucrative per unit time, requires very little in the way of formal qualifications and is for the most part unregulated means that it attracts a certain type of personality.

I suspect very few people decide to be estate agents to serve a higher purpose or to fulfill a moral calling. These are folks who are looking to make a money without having to jump through too many hoops beforehand or incur much risk in the process. And in hot markets like these ones, their ranks swell with temps, dilletantes, chancers and punters who smell a quick profit. Add to this the fact that in all likelihood, your interaction with any agent will be a one-off and therefore there is no incentive for them to be well behaved because they know they will likely never have to deal with you again!

There are lots of exceptions of course and I have had the pleasure of dealing with both good and bad 'uns. Fair to say that when they are good, they can be very good. But when they are bad... oh boy....

But as newboots and simonethebeaver point out - in the end it's sellers and buyers and the nature of the transaction that provides the setting / opportunity for bad behaviour.

Clearly some people are downright nasty and estate agents can either be unfortunate scapegoats or willing accomplices to that bad behaviour....

[newboots]

Yes, no one likes Estate Agents. But their mantra is "buyers are liars and vendors are greedy" and there is plenty of truth in that.

[Mick Mac]

It's better than it was. I bought our first ED house in 2001 on sealed bids and I wasn't even sure there were other bidders. How would you know?

When we were trying to exchange the estate agent called and told us the seller thought we were taking too long, they were putting it back on the market and we were now in a contract race. We had to exchange before the other buyers got their contracts to the vendor's solicitor.

It's never over till it's over.

[jimmyraj]

Have to agree that it's the sellers who are often to blame not just the agents. When I sold my flat about four years ago - through KFH as it happened - it went to sealed bids with two very competitive offers put in. Naturally I took the higher bid and then the next day the agent informed me that the other party had put in an offer 10k higher. I went with the original winner of the sealed bids as I think you have a moral obligation to honour such a bidding process. Maybe its karma, but the process of buying our house - which involved a six house chain - was relatively smooth and completed in two months. What goes around comes around etc...