What should I learn from the first experience of losing a house?

Firat · 5 December 2017 at 3:41PM

Hello guys.

We have been looking for a house to buy in South Liverpool which has become a very competitive market recently. We are first time buyers. We have a baby, a dog, visitors from abroad frequently etc. so the list of qualities we look in a house is quite long. After three months of looking we put in an offer for a house which was on the market for 240. It was listed for 250 before but did not go. Our first offer was 242 and was rejected. Our second and final offer was 245. At this stage the real estate agent asked for the mortgage certificate and asked for the size of our deposit (10% - could be higher on the basis of how much money we'd like to spend on the house before moving in). Today we were told that they accepted an offer of 247 from someone with a more sizeable deposit. We are very disappointed. Since this was our first experience I wonder what to learn from it and how to strategise for the future. Our budget in our head was 240. But now I am coming to realise that houses that are out for 240 are likely to be sold for around 250 which is over our budget. Does that mean we need to revisit our budget and maybe limit our search for houses that are on the market for 230? (which means we can't afford the house we want and it is very disappointing

Secondly, a friend of mine said that she never sends mortgage certificates to agents and never answers questions about the deposit. She tells them her mortgage is in place and they need to take her word for it or the deal is off. She says that as soon as they see you can afford more they start pushing you for a higher price. Is this correct and doable? I am totally confused...TIA.

Grampus8 · 5 December 2017 at 3:53PM

Firat wrote: »

Hello guys.

We have been looking for a house to buy in South Liverpool which has become a very competitive market recently. We are first time buyers. We have a baby, a dog, visitors from abroad frequently etc. so the list of qualities we look in a house is quite long. After three months of looking we put in an offer for a house which was on the market for 240. It was listed for 250 before but did not go. Our first offer was 242 and was rejected. Our second and final offer was 245. At this stage the real estate agent asked for the mortgage certificate and asked for the size of our deposit (10% - could be higher on the basis of how much money we'd like to spend on the house before moving in). Today we were told that they accepted an offer of 247 from someone with a more sizeable deposit. We are very disappointed. Since this was our first experience I wonder what to learn from it and how to strategise for the future. Our budget in our head was 240. But now I am coming to realise that houses that are out for 240 are likely to be sold for around 250 which is over our budget. Does that mean we need to revisit our budget and maybe limit our search for houses that are on the market for 230? (which means we can't afford the house we want and it is very disappointing Secondly, a friend of mine said that she never sends mortgage certificates to agents and never answers questions about the deposit. She tells them her mortgage is in place and they need to take her word for it or the deal is off. She says that as soon as they see you can afford more they start pushing you for a higher price. Is this correct and doable? I am totally confused...TIA.

And how has that tactic worked for her?

There's no point playing hard ball at your stage, you need their help. Just be honest and save up a bigger deposit I'm afraid.

Cakeguts · 5 December 2017 at 4:04PM

It sounds to me as if you are looking for the perfect house which of course doesn't exist? It is the long list of qualities that makes me think this. Every house will be a compromise. You won't get everything on the long list.

You need to start again from the basis of what you need a house to have not what you want a house to have. An example of this is that you might only need a house that has 2 bedrooms but you want a house that has 3 or 4.

If you start from what you need you may find that there are a lot more houses that you can afford than are on the want list.

Surrey_EA · 5 December 2017 at 4:04PM

Some houses that are listed for £300k will sell for £240k, some houses that are listed for £230k will sell for £240k. There are a number of different factors that affect what price a property comes on to the market for, and this will vary from property to property.
Some sellers are realistic, others have very optimistic expectations.

As for your friends advice about providing evidence of mortgage, do you think this strategy is likely to work well in a competitive market?

It makes very little difference to the EA whether a buyer pays an extra £5k - £10k. Unfortunately it is not unheard of for some buyers to put forward offers on houses they are unable to afford. Part of the EAs job in representing the seller is to verify that a buyer is able to proceed at the price agreed.

bobobski · 5 December 2017 at 4:24PM

A friend recently said to me "if you want perfection, don't get involved with property".

You'll never find the perfect place within your budget. So find something that will do (particularly for your first property) and focus on not looking back at what you've lost. I say this having lost two properties this year far closer to exchange than you were with your one and having no choice but to suck it up and go back to the drawing board.

Good luck.

JoJo1978 · 5 December 2017 at 4:40PM

The emotional trauma of losing a house you'd fallen for or was particularly suited to your needs is never easy. One thing to take away is to try not to get too attached before a deal is sealed. And that moment is long after your offer is accepted and the legals are started.

So part of your strategy should be about giving yourself options. Challenge yourself to see below and (slightly) above your price bracket, reconsider the search radius if you can, look at different styles of houses that you may have ruled out.. Have more than one opportunity on the go at any one time.

MRPEEVED · 6 December 2017 at 9:16PM

This may not help you, but I am a firm believer in 'what's meant to be will be'.
Try to think of the potential of the homes you view rather than what it is now.

Thrugelmir · 6 December 2017 at 9:38PM

Firat wrote: »

Today we were told that they accepted an offer of 247 from someone with a more sizeable deposit.

That's the nature of house buying. Be less selective and widen your horizons. Focus on future potential.

Lauralou79 · 7 December 2017 at 9:21AM

I’m a believer of meant to be too, we had offers turned down on two houses. On the morning our second offer on the second House was turned down another one came up on rightmove. We viewed it, loved it and offered the same day. After a little negotiation we secured it and have been here 5 months. It was without doubt the best one for us that we viewed.
Advice is to take a deep breath and where ready continue looking. Look at your criteria and see what you would compromise on if needed. Maybe look at houses you wouldn’t necessarily consider ... worth a try, it may surprise you.

AdrianC · 7 December 2017 at 9:57AM

Firat wrote: »

Our second and final offer was 245. At this stage the real estate agent asked for the mortgage certificate and asked for the size of our deposit (10% - could be higher on the basis of how much money we'd like to spend on the house before moving in). Today we were told that they accepted an offer of 247 from someone with a more sizeable deposit.

Look at it from the vendor's point of view.

One person has put in a series of low-ball offers, and is reliant on a high LtV mortgage.
The other person has put in a higher offer, and is less likely to have mortgage issues.

Which would YOU sell to?

Our budget in our head was 240. But now I am coming to realise that houses that are out for 240 are likely to be sold for around 250 which is over our budget. Does that mean we need to revisit our budget and maybe limit our search for houses that are on the market for 230? (which means we can't afford the house we want and it is very disappointing

If you can't afford the house you want, you can't afford the house you want. So you need to decide what you're willing to compromise on. Have you never watched a single episode of Phil & Kirsty...?

Secondly, a friend of mine said that she never sends mortgage certificates to agents and never answers questions about the deposit. She tells them her mortgage is in place and they need to take her word for it or the deal is off.

Riiight.

She says that as soon as they see you can afford more they start pushing you for a higher price.

Ignore your friend, she's an idiot.

Remember - the EA doesn't decide what offer to accept. The vendor does that. The EA is employed by the vendor - they might advise the vendor, and they certainly have a duty of care to their customer to ensure that the offer is actually based on really being able to afford it. Without checking your finances, how can they do that?

Let's look at your scenario above...

1. £245k, eventually, and the EA says "This buyer won't confirm anything about their finances"
2. £247k, "This buyer has proved their finances, and has a healthy deposit, so needs a relatively low LtV mortgage"

Which would you go with...?

If you're lying to the EA about your offer, and saying "I can't afford more" - when you can - then the EA may well raise an eyebrow and pass that on to the vendor. Why wouldn't they?

If, otoh, you're absolutely upfront, and say "Yes, I could afford more - but that's irrelevant, because I don't think this house is worth more, so won't pay more", then there's zero leverage there. But be prepared to walk away...

But that's all academic, because you can't afford more.

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What should I learn from the first experience of losing a house?

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