How to handle competing bids

If you are fortunate, and you are in a seller's market, you may be inundated with offers from buyers desperate for the type of home you have, and all competing for a small pool of such properties.

There are a number of ways for you to go. If you are perfectly satisfied with the price, then you need to make a decision based on which buyers would be best for you. Click here for how to select the best buyers.

Bidding wars

If you feel that you may be able to squeeze more money out of the transaction, you can institute a bidding war in which you invite the competing buyers to make higher offers. This is anathema to buyers, of course, because they keep being pushed up. Sometimes they just pull out of the arrangement altogether and look elsewhere.

Sealed bids

One fairly civilised way of meeting that objection is to have "sealed bids". How this works is that the competing buyers are asked to write to the estate agents with their highest price. At a particular time, the estate agent will open all the bids and tell you the results. You can then choose the highest bid. Actually, you are not bound by this arrangement at all, and you can still choose a lower bid if you think the buyer is more likely to perform, or you can carry on trying to push the price up.

Contract races

Another way of reacting is to have a contract race. Under this arrangement, you accept offers from two or more buyers, and turn it into a race as to which gets to the point of exchanging contracts first. This would only be of interest to you if your priority is to exchange contracts quickly. Again, you are not bound by the arrangement. If, when the first buyer to reach the finishing line contacts you to exchange contracts, you want to sell to someone else for any reason, you can back out of the arrangement. Nothing is set in stone till you actually exchange contracts with someone.

Remarketing

If you immediately get an offer at the asking price, or if the buyer makes a lower offer that is easily pushed up to the asking price, you must consider whether you have under-priced the property. Don't feel you have to accept an offer just because it's the price you are asking. See what a few viewings brings in. If it is clear that several people are prepared to pay the asking price, then you should seriously consider upping the price. It may be that when you saw the estate agents before you put the property on the market, some suggested high figures, other lower figures, and you put the property on the market in the middle or near the lower end. If so, it just proves that the higher figures were possibly the correct ones.

Gazumping

You are not doing anything wrong if you don't accept the offer and put the property back on the market at a higher price. Gazumping only occurs if you accept an offer and later pull out and go for a higher price. I don't think there's anything wrong with gazumping, as it happens. You are trying to maximise your sale price. it's business. Do what you have to.