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best and final offers - tactical tips please???
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# 1
happinessfactory
Old 04-10-2007, 7:25 PM
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Default best and final offers - tactical tips please???

Hello,

You may have read my earlier thread bemoaning the state of the West London zone 2 housing market.

Anyway, earlier this week we bid on a house that is currently in very poor condition but on a very desirable road. It is currently divided up into two flats and needs an enormous amount of work, but because of its location has attracted HUGE interest.

We supposedly had a sealed bids situation on Monday but it later transpired the vendor had no intention of making his mind up until tomorrow. The house is being sold following a court order, and tomorrow is apparently the meeting with his co-owner's solicitor.

The house is being marketed through four agencies so over the last few days we've tried to get the agent through whom we viewed on side, in the hope he would find out how much it would take to close the deal down; but either the vendor is a complete shark or the agent a total muppet because we are no closer to striking a deal.

Tomorrow 9am is a 'best and final bids' situation. We really want and need this house but can't afford to overpay on it because of the enormous amount of work it needs to be habitable. (We'd also be paying rent to live elsewhere whilst the building work is being carried out).

What should we do? We sold our flat back in April so are chain-free cash buyers, and we're prepared to make a strong offer, but I'm rapidly learning this means nothing in the West London market...asking price plus, or nothing.

Help, please. Before I go mad...

Thank you!
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# 2
dolce vita
Old 04-10-2007, 7:30 PM
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Whatever you do, don't get into a bidding war. Decide what you are prepared to pay and offer no more.

best wishes.
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# 3
Romani Ite Domum
Old 04-10-2007, 8:38 PM
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One thing that came up on this board a few months back is that "sealed bid deadlines" and "best and final offers" don't always mean a thing and offers can still come in after the deadline.

Don't overstretch yourself, but make a good offer. Good luck.
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# 4
cheekeemonkey
Old 04-10-2007, 9:12 PM
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We had a similar situation a while back.

We spoke to the vendor and his EA to try and do a "hearts and minds" on the house owner!

It transpired that they were looking for a strong offer but also someone who could move quickly.

So try and find out a bit more if possible.

PS - we didn't get the house -sold to a bl*&$y developer!
Failure is not in falling down but in not getting back up again
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# 5
budget_counsellor_shaz
Old 04-10-2007, 9:46 PM
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I've been there too. The best advice I can give you is do not spend more than you can afford (or more than what the property is actually worth). There are plenty more fish I mean houses out there. Don't let your heart rule your head:rolleyes:

If you have cash why not go to an auction there are a couple coming up?

Anyway whatever you decide all the best

Shaz
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# 6
happinessfactory
Old 04-10-2007, 10:41 PM
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Thanks for the replies all.

I had a thought - could we go in with a real pie-in-the-sky offer in the hope of getting the house without further ado, and then ask our surveyor to deliberately undervalue the property? When I say 'undervalue' I mean its sensible price: what the house *should* cost based on the Land Registry numbers, the wider postcode's overall annual % increase and the cost of works.

Because we have very low LTV we could make up the shortfall in the valuation out of capital if it meant paying less overall? Although of course the buyer could turn round and tell us to sod off........

Last edited by happinessfactory; 04-10-2007 at 10:45 PM.
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# 7
Romani Ite Domum
Old 05-10-2007, 10:26 AM
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You might be getting a little carried away with this idea.

If you are willing to risk the valuation/survey fee and more time of uncertainty then it may be worth it for you.

I am not sure you can ask the valuer to undervalue the property though.

Perhaps you could get a valuation and full survey for a high LTV on an offset mortgage? That way the lender will be more inclined to get true valuation in the current economic climate. If that was to come in at your unaffordable offer or close you would have to walk away. Of couse, even if the valuation was less than your offer, it dosn't mean the vendor will accept a revised offer either.
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# 8
Richard Webster
Old 05-10-2007, 11:58 AM
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Decide what you want to offer and add a figure like £102 to it!

The theory is that someone else might have offered the round figure amount you thought of so you want to beat them! Taking the process further they might have though of adding £100 so you want to beat that!

Problem here is where you stop second guessing other's bids.
RICHARD WEBSTER

As a conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability except to fee-paying clients.
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# 9
nobblyned
Old 05-10-2007, 3:35 PM
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I bid over asking price in a "best and final" arrangement in SW London about 2 years back. I bid around 1% above asking and as Richard suggests above went to a non-round number just above this to outfox the other bidders!

We got the place, but I've no idea what the other bid was, so I may have just cost myself a few k. Still, we are very happy there. The market was as busy in SW London as it is now, and 1% above sealed the deal for us. I would certainly play on your ability to move quickly without needing a mortgage though, perhaps advising in your letter that your offer is subject to them exchanging within 6 or 8 weeks, would show that you are completely confidant in your ability to move quickly and are in fact questioning theirs.
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# 10
happinessfactory
Old 07-10-2007, 8:04 PM
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Thanks for the tips everyone.

We didn't get the house - we were 'second favourites' supposedly, but were outbid by a property developer offering a whopping £20k more. We've been told 1 in 3 sales falls through so let's wait and see what happens. We couldn't afford it at that price though, so we don't feel so bad. It's not like we were outbid by a mere tenner


I'm so bored of looking for houses now. :confused:
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# 11
Nenen
Old 07-10-2007, 8:12 PM
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so sorry you didn't get the house... but as you said, you never know! Good luck.
“A journey is best measured in friends, not in miles.”
(Tim Cahill)

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# 12
carolt
Old 07-10-2007, 8:48 PM
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TBH, I think you'll be glad you didn't get it in a little while - W London prices are so unrealistic at the moment and the only way is down.

I used to live in Ealing and was truly shocked when I had a brief glance for old time's sake at Ealing prices. Flats in the very manky road we used to live in - a whole long street, all absolutely identical maisonettes, in W Ealing - I happen to know went for a shade over 60K about 11 years ago. I saw a couple there for 325K+, advertised last week. As I used to live in one I know they are really shoddily built, manky flats and in a pretty grotty, inconvenient area - I doubt I'd buy one for 60K unless I fancied getting into BTL (which I don't). Anyone who buys one for 325K, let alone more, is an absolute idiot.

Not suggesting that you are - I assume the place you found was much nicer - but am just trying to demonstrate that with regard to a particular street whose history I happen to know well, going up over 500% in just over 10 years does not seem in any way sustainable.

Give it time, prices will return to something approaching sanity again - W London is nice, but not THAT nice...
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# 13
mr.broderick
Old 07-10-2007, 9:35 PM
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Quote:
Originally Posted by carolt View Post
TBH, I think you'll be glad you didn't get it in a little while - W London prices are so unrealistic at the moment and the only way is down.

I used to live in Ealing and was truly shocked when I had a brief glance for old time's sake at Ealing prices. Flats in the very manky road we used to live in - a whole long street, all absolutely identical maisonettes, in W Ealing - I happen to know went for a shade over 60K about 11 years ago. I saw a couple there for 325K+, advertised last week. As I used to live in one I know they are really shoddily built, manky flats and in a pretty grotty, inconvenient area - I doubt I'd buy one for 60K unless I fancied getting into BTL (which I don't). Anyone who buys one for 325K, let alone more, is an absolute idiot.

Not suggesting that you are - I assume the place you found was much nicer - but am just trying to demonstrate that with regard to a particular street whose history I happen to know well, going up over 500% in just over 10 years does not seem in any way sustainable.

Give it time, prices will return to something approaching sanity again - W London is nice, but not THAT nice...
Yeah people been giving that advice for years now, wonder if this piece of advice will be diferent from all the previous.:confused:
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