need bidding advice and broker advice!

w0nkyd0nkey

Hi guys, just looking for a bit of advice!

I'm a first time buyer and have made an offer on a house this week. The offer was rejected and i'm planning on going back in with a higher offer.

Question 1: The house is on the market for 125k and there is a 5k gift deposit (therefore the guy is willing to sell for 120k). I went in initially with 115k and it was rejected (not a shock!) but now i'm planning on going in higher either tomorrow or the day after. Does anyone think that going in with 116.5k is too small a leap? I'm hearing conflicting views due to the depression in the market. How long do you try and play hardball for?

Question 2: I have been liasing with a mortgage broker (after taking the advice from many sources, inlcuding this site!!) and he is whole market, free and has provided family members with mortgages before. However, at what point do i have to involve him once i have an offer agreed on a property? For example, i'm being advised to go and speak to my bank again to see what they can offer. If my offer is accepted in two days time, from that point in time, can i tell the estate agents that i'm speaking to my bank a few days later or do i have to put them in touch with my broker and then speak to him as soon as possible to broker a deal?

I'm being advised to keep putting my offers in and then if one is accepted, explain to the estate agents that i'm then going to go away and sort out my mortgage. In this time i'm being advised to get a deal from my bank and then ask the mortgage advisor to beat my quote. Would people advise this is a sensible aproach?

Any help on the above issues would be very useful!

thanks

dimbo61

Go and see the bank first and see if you can afford the mortgage and what they will lend you.
do you have a big deposit 10%( £12,000) plus £5,000 for fees , survey,legal costs,mortgage costs and moving in costs etc
You should have your mortgage offer from the bank before you make offsers on houses that you might not be able to afford.
Decide on what kind of mortgage you want, find out about life cover, council tax, house insurance and lots of other things about the area and this house.

hostman

Are you relying on the gifted deposit for your whole deposit, or do you have more money to use for the deposit?

If not, you'll end up paying a very high interest rate with only 5% deposit and you'll also run into problems borrowing the amount you need, as some lenders are wary of gifted deposits or additional incentives and depsite many claiming to allow up to 95% LTV, they are refusing many people with small deposits, due to the danger of the owner falling into negative equity, as the market is rapidly declining.

Is the property already well priced (from a buyers perspective) compared to similar properties in the area? If so, offering £115k seems like a good offer to me, the owner should have taken it. How long has the property been on the market? If its only just come on the market the owner may be reluctant to sell for a lower offer so quickly. Do you know what the current owner paid for it and when? If not, check, for free on https://www.houseprices.co.uk, if they bought the house after 2000, it will be listed. Do you have property-bee installed? If not, install it, you'll be able to combine it with Rightmove to "spy" on the intimacies of buyer bating by the EA's, such as price reductions, description changes and how long the property has been marketed for.

We're in the process of buying now and before we viewed any properties we arranged an agreement in principle with our chosen lender. This does not garauntee a successful mortgage approval, but its a good starting point and something the EA's we spoke to appreciated, as they see a lot of chances wanting viewings with no real hope of buying. The agreement in princple involves a credit check and essentially means the bank could lend to you x amount, if the information you have provided is correct and subject to verfiable evidence (such as confirming your income). Soon as your offer is accepted you should then start the full blown mortgage application, our approval has taken just over a month with Nationwide, so can take a while.

I wouldn't go back and increase your offer just yet, let them sweat for a little while.

But I'd be able to declare fully what I would do if you could answer the above questions

0james0

Its almost impossible for anyone on this forum to tell you what offer to make, we've not seen the house and don't know the area. For all we know £115,000 is too much. That wasn't an unreasonable offer by the way.

He needs you more than you need him (the seller). There is an almost endless choice of houses for sale, only a very limited number of buyers. -especialy ones who can get a mortgage. You can be pretty bullish when you are offering.

I would get your broker involved now. Use his expertise to help guide you with offering, it's free after all. You may find he'll offer for you, I've been doing it for a while as I feel I get a better deal for them. Less Bull from the agents when an offer comes from a broker. I'm sure he won't mind and will see it as helping his chances of winning your mortgage.

If you are doing a vendor gifted deposit you could really do with proper help, the last thing you want is for a surveyor to not value the property up to your higher figure (due to the gifted deposit), the seller refuses to drop the price and you are a few hundred £ out of pocket!

Go see your broker and it will be ok. You can check what your bank has to offer on their website, there wont be anything in branch that they isn't on the website.

minimike2

dimbo61 wrote: »

Go and see the bank first and see if you can afford the mortgage and what they will lend you.
do you have a big deposit 10%( £12,000) plus £5,000 for fees , survey,legal costs,mortgage costs and moving in costs etc
You should have your mortgage offer from the bank before you make offsers on houses that you might not be able to afford.
Decide on what kind of mortgage you want, find out about life cover, council tax, house insurance and lots of other things about the area and this house.

Why would you advise someone to go to a bank? Thats crazy.....

A bank can only lend its own mortgage products. A broker can lend from thousands of mortgage products. What a bizzaire thing to suggest, especially to a first time buyer, who could be easily swayed to buy the banks own over-priced insurance policies.



OP - I would be tempted not to make a higher offer. Sit on it a week. Call them back, re-affirm your offer at £115k. Property is coming down in price. The sooner vendors realise this the better. Do get the mortgage agreed in principle first though so that they know you are able to buy and serious about it.

w0nkyd0nkey

hi, sorry, i wasnt very clear in my original post.

About 6 months ago we sat down with the mortgage advisor and went through our financial details etc and he ran our data through the Halifax and we got a mortgage in principal upto 140k. He then ran us off a mortgage certificate to prove that we have the viable finances in place.

Currently we have a 10% deposit and additional funds for extras, fees etc.

So, essentially all we are waiting on is an offer being accepted and then deciding on the precise mortgage we want. Its this period i'm unsure about. If for example our offer in 2 days time is accepted, how long do you have for the period where you decide who you want to get your mortgage from and what exact mortgage it is? eg. we may go to the broker but do we have time to scope out some more deals now we have exact figures, can we play them off against each other? challenge the boker to beat our bank quote?

hostman

w0nkyd0nkey wrote: »

hi, sorry, i wasnt very clear in my original post.

About 6 months ago we sat down with the mortgage advisor and went through our financial details etc and he ran our data through the Halifax and we got a mortgage in principal upto 140k. He then ran us off a mortgage certificate to prove that we have the viable finances in place.

Currently we have a 10% deposit and additional funds for extras, fees etc.

So, essentially all we are waiting on is an offer being accepted and then deciding on the precise mortgage we want. Its this period i'm unsure about. If for example our offer in 2 days time is accepted, how long do you have for the period where you decide who you want to get your mortgage from and what exact mortgage it is? eg. we may go to the broker but do we have time to scope out some more deals now we have exact figures, can we play them off against each other? challenge the boker to beat our bank quote?

The lender will look at a screen containing the most up to date numbers from the lenders he is authorised to deal with. Your bank will most likely not be the most competitive, so it will probably be quite easy to beat the rate.

You'll want to start the mortgage application as soon as possible, otherwise you risk the whole process dragging on and the seller accepting other offers (if they exist) if you are seen to be taking a long time. IMO don't leave it more than a week between offer being accepted and you starting mortgage application.

dimbo61

The devil is in the detail !
Well done on sitting down and talking to the mortgage adviser and getting a firm idea of what the Halifax would lend you.
Contact a whole of market broker and get advice on whats available now ( as deals are changing daily ) and what he/she recommends.
Dont pay too much and try for a deal which gives you a few years to build up the equity in your home.
Having a 10% deposit and extra funds to pay fees etc will mean less chance of getting into financial problems once you have bought the property.
You can get life assurance cheaply from CAVENDISH online as recommend by
MARTIN

0james0

Do you actualy have a 10% deposit or is it partly coming from the seller (vendor gifted), you mentioned it in your first post. If you are doing a vendor gifted deposit then you will be restricted on lenders and you will find Halifax at the momment to be cheapest.

When doing something like a vendor gifted you need to look more at who will lend rather than what rate. I bet your bank would not even entertain the idea.

Beckymarshall07

hi in similar position to you - have put in final offer on house at 115k but wants 130k (but needs work doing to it). I think your offer is reasonable so let EA sweat. As for broker - I used whole of market one too but found a better deal online through moneysupermarket - share to buy and HSBC tracker ones which broker couldnt match. Increasingly, some of the best deals can be found directly with banks/building societies - assuming you are a FTB? Good luck.