SEALED BID VS. SEALED BID/OUTCRY AUCTION

There are numerous types of sealed bid sales. The most common is a simple solicitation of offers by Sealed Bid where all the bids are opened at an appointed time and the top bid is either accepted or rejected.  This form of sale relies on bidders’ willingness to submit a single bid that is truly their best and last offer.

Individual bidders function in a static environment so the competitive aspects of the Simple Sealed Bid method are minimized.  Unable to verify interest by others, concerns about overbidding can lead potential buyers to moderate their bids decreasing the likelihood that top dollar will be achieved.  As it is harder to be fully confident that the best result has been obtained, a greater percentage of the high bids for Simple Sealed Bid offerings are rejected, particularly when more than one owner must agree on acceptability.

After careful study, JJManning Auctioneers has modified the Simple Sealed Bid method to ensure that no money is left on the table.  Our strategy is to offer property at Sealed Bid Sale with those submitting the top bids invited to compete openly in a private Outcry Auction.  This allows potential buyers to not only make their own best offer but to react to those of others as well. The hybrid form of Sealed Bid/Outcry Auction brings beneficial excitement and competition to the process, without the necessity of conducting a public auction. All interested parties must compete to reach the final round where heavily vested top prospects bid against each other, in a fluid environment controlled by an experienced auctioneer, with the seller reaping the reward.

NSTAR Sealed Bid Auction.

After the City of New Bedford, MA declined an offer to purchase a surplus NSTAR electric company waterfront property for one dollar, largely as a result of a $3.25 Million responsibility for clean-up included in the package, we offered the industrial zoned property at Sealed Bid Auction with an unpublished reserve of $500,000.  The winning bidder coveted the property’s port facilities and bid upwards of $12 Million (not including the environmental responsibility) to ensure success, realizing a sale price more than 24 times the seller’s reserve.    

Sample Property Sold by Manning & Co. using Sealed Bid/Outcry Auction.

Sale Norwood, MA
37 unit apartment complex
Alden Park Apartments 1&2 Bedroom Apts. & Townhouses

Results:
Received 27 Sealed Bids ranging from $500,000 to $2,105,000. - The top five invited to a Private Outcry Auction

Final Sale Price:
$2,585,000, which was $535,000 above appraised value!