Buying Land

Tips to Get Better Results from Sealed Bid Sales

Tips to Get Better Results from Sealed Bid Sales

Let me preface this article by saying that I am not a big advocate of sealed bids. I think they often limit the best price for sellers because they create a narrow window for market activity to fully occur, but sealed bids do have their place. If you participate, use these simple tips to help ensure you’ll be declared the winner of the bidding process.

When you participate in a sealed bid land auction offering, be sure to consider these 4 things:

1. Get the bid packet and READ it.

Understand it. Hardly any two sealed bid sales are the same. Each one will have different requirements, bid procedures, and offer/closing documents. Be sure you understand and follow the exact requirements so you don’t miss the deal on a technicality…it happens! Also, don’t assume that the bid sale you are planning on attending will be exactly like other sealed bid events you have attended in the past.

2. Put your best foot forward.

It’s easy to sit around and speculate on who will bid, what a reserve may be, what other people may offer, etc. I’ve learned, however, that it’s best to submit your best offer and sit down and wait for the results. Sure, everyone wants to “steal” a deal by paying some ridiculously low price, but it doesn’t happen as often as you’d think. Do your research on the property, figure out what works for you, and make your best offer.

3. Use an “odd” number for your bid amount.

I don’t have any scientific data to back this one up, but I’ve seen it many times. Most people bid in even amounts like $86,000 or $1500/ acre…and the one guy who bid $86,217 or $1513/acre gets it. This method seems to give you an edge. Pick your best number and then add a tiny amount to make it an odd number price.

4. Go to the bid and hand-deliver your offer.

Yes, even when you can fax or email it- GO! Be there in person and see the actual bids. You may be surprised to learn that shenanigans are not completely uncommon at bid sales. It’s easy for people to be in a silent partnership or devise other ways to manipulate the final “high bid” to steer the deal their way. No, this doesn’t happen at every bid, but it happens enough that you’ll want to eliminate the chance it’ll happen at yours. The best way to do that is to be there in person (or send someone to represent you) and see all the bids for yourself.

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About the author

Pat Porter

Pat is the owner / broker for RecLand Realty. RecLand specializes in selling hunting land, timberland, farms, & ranches in LA, AR, MS, TX, IA, & MO. See their company website at RecLand.net.

Pat, his wife, and three boys are land owners and enjoy hunting, shooting, and an outdoor lifestyle. They live in northeast Louisiana and are usually in the woods somewhere several times a week.

6 Comments

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  • Can you elaborate on how to see the bids if you go to the sealed bid yourself? And yes I’ve seen some shady deals, auctions, including illegal actions taken by the auctioneer group, especially lawyers who rep. the seller and/or the local Gov. (at tax sales) and try to be the sole source for the buyers too (everyone needs to fight this one, don’t automatically pay the sellers lawyer because he says you can’t use someone else or even do the closing yourself, I prefer to use my own title attorney).

    • Hey! Thanks for your comments. Every sealed bid I’ve attended for myself and for clients has afforded me the opportunity to see the bids as they were opened and posted. This has been as informal as staring over the shoulder of the person opening the envelopes and seeing them as he saw them. Others had various degrees of organizing the received bids and then a way for all participants to see the information the organizers used to select the winner. The point it that there needs to be some level of oversight to help prevent possible collusion between a buyer and the organizer of the sale. This does happen…sadly. But it’s the exception, in my opinion, and likely occurs more in the more loosely-goosey type sales…but I’ve seen it.

      Hope things are good for you. All the best!

      Pat

        • Really good point! …and to your point, I had thought back to a couple timber sales I’d been a part of when thinking about this little article. One of the gentlemen attending the first timber bid sale I was part of was actually there because of his previous experience with less-than-honorable shenanigans in the past. We have become friends over the years, too. I made a mental note of that then and started paying attention more at all future sales I participated in.

          So, again…very good point! Thanks for participating in LandThink.

  • This is a great article with meaningful information. I have never been a part of sealed bid but I am sure at some point in my career it will happen and I will take this information with me when it does happen.

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