Sealed Bid

In home buying, a sealed bid is where parties submit a letter to an auctioneer, disclosing the amount they would pay to purchase a property. The party submitting the highest bid will normally secure the property.

However, some owners may prefer to choose bidders that they consider to be the lowest risk (least likely to withdraw their offer or experience complications with their mortgage application).

In contrast with a sealed bid, an English auction allows individuals to compete against other bidders and they may make as many bids as they wish. This is called an open ascending price auction.