Offer strategy when there's another buyer

LittleMissAspie

We'd like to put an offer in on a house. It's up for 150k and the EA says someone else has offered in the low 140s. The vendor hasn't accepted, wants more.

I don't want to get into some silly bidding war, so do we offer mid 140s and get played off against the other buyer to increase, or do we go straight in at the max we're willing to pay and say this is our only offer?

[Deleted User]

tell them you are making a firm and final offer and pitch it at what you would be happy to pay. Say that a condition is that the property is withdrawn from sale.

We did this and it worked

shane42

FAP or very close they two interested people

property.advert

You know the offer is low 140s, say 142500 so you offer 145. If you get counter offered, it will probably be very near 147500. If you then counter off again, you have to go to 149 or 150.

If you go straight in at 150 you lose the chance at 145. You also need to look at the relative merits of your bid versus that of someone else. If you are cash and they are selling but with no sale agreed and the owners of the property you want are looking to move, then they simply cannot accept a long drawn out offer from the other potential buyer as they may lose the house they themselves want to buy. You can leverage that to your advantage. Even if they offer 150 you can match with better terms etc. If yours is the worst situation, then you are largely fighting a losing battle which you can only win with a higher bid.

If you are confused and unsure, read up about game theory and chess (move and counter move) and even poker. If you have balls, then a face off with the vendors without the agent in attendance and asking just what number they will take can reveal a lot. They may just say the asking price but you will be able to interpret their body language etc.

You need to have a "walk away" in your arsenal as well though.

boomerangs

LittleMissAspie wrote: »

the EA says someone else has offered in the low 140s.

Please note, there's no guarantee that the other prospective purchaser exists at all. EA's are very fond of telling porkies. You must assume that they don't exist otherwise you risk getting taken for a right plonker.

property.advert

boomerangs wrote: »

Please note, there's no guarantee that the other prospective purchaser exists at all. EA's are very fond of telling porkies. You must assume that they don't exist otherwise you risk getting taken for a right plonker.

A very good point but one which will come out when you go to see the vendor without the EA.

LittleMissAspie

Yes it did cross my mind that the EA could be lying. Then again the house sold in a week last time, it fell through recently. We're in a good position being FTBs but I imagine anyone else interested is also FTB or BTL, it's a starter home.

Is going to see the vendor normal practice?

shirlgirl2004

Going to see a vendor is not normal practice.

Make sure you have an agreement in principle for your mortgage and that you don't put any conditions on the offer such as "I want to take my parents to see it". Condiitons can alienate vendors. We took a slightly lower offer when the higher bidder put the above condition on their offer.

googler

"Going to see the vendor" can also backfire if the agent has specifically hired an agent because they DON'T want to meet/talk/negotiate with prospective or actual buyers......

googler

LittleMissAspie wrote: »

We'd like to put an offer in on a house. It's up for 150k and the EA says someone else has offered in the low 140s. The vendor hasn't accepted, wants more.

So... someone else has offered low 140s, this has been declined, and the other party has kept their offer on the table? They haven't walked away and gone looking for another property, but they're just waiting to see if the seller changes their mind after some unspecified period of time?

You need to ask the EA about the other offer, in line with the above questions.

You also need to specify that your offer, when you make it, is open for acceptance or denial within a specified timeframe, and that if accepted, it's a condition that the property be taken off the market once it is.

RobertoMoir

Make an offer based on what you think the property is worth. The other buyer shouldn't enter your mind - even if they really exist and even if they "win" the bidding war in the end, you still shouldn't pay more than you think the house is worth, and house buying is one time where there really are "plenty more fish in the sea".