Gazumping

eattothebeat

Hello,

I'm in the process of selling my property. I live in Scotland and the property is in England. It was valued at £279,950 so I was hoping for something in the region of £260,000 which would give us a really good deposit for a little bungalow where we could spend some money on it etc. I just got an offer of £249,950 so just shy of the buyer having to pay stamp duty. he is a buy to let buyer with 50% deposit. The estate agent is trying to convince me of accepting the offer whilst still viewing the property. I have a bit of a moral dilemma with this.
What are other peoples views on this?

G_M

So why not be honest? Say you are hoping for more but are willing to proceed on the basis of a quick sale whilst still marketing the property. If the buyer can exchange fast you'll sell at £249950, if it goes slow and you get a better offer, you'll go with the better offer.

Your buyer will either accept this in the hope of getting your property cheap, or he'll walk away, or he'll up his offer hoping for a firmer commitment from you.

sonastin

G_M wrote: »

So why not be honest? Say you are hoping for more but are willing to proceed on the basis of a quick sale whilst still marketing the property. If the buyer can exchange fast you'll sell at £249950, if it goes slow and you get a better offer, you'll go with the better offer.

Your buyer will either accept this in the hope of getting your property cheap, or he'll walk away, or he'll up his offer hoping for a firmer commitment from you.

If its a BTL investor, he's in it for a business transaction rather than an emotional attachment so he should see the sense in this from your point of view. If he doesn't want to play, its because the risk on his part is too great but I think it is still worth trying...

blackshirtuk

The stamp duty at £280k will put a lot of people off. That will cost the Buyers £8-9K as opposed to £2.5k at £250k

If you are willing to accept £260K why not market the property with stamp duty paid.

This will cost you around £8-9K so only accept offers over £269K and you will be in the same position.

pardal51

G_M wrote: »

So why not be honest? Say you are hoping for more but are willing to proceed on the basis of a quick sale whilst still marketing the property. If the buyer can exchange fast you'll sell at £249950, if it goes slow and you get a better offer, you'll go with the better offer.

Your buyer will either accept this in the hope of getting your property cheap, or he'll walk away, or he'll up his offer hoping for a firmer commitment from you.

How can a buyer commit a fast exchange - set date? It is beyond their control, i.e., bank, surveyor, solicitor etc. Say buyer commits and something goes wrong, would that be fair? I know that life isn't fair, but...

blackshirtuk

pardal51 wrote: »

How can a buyer commit a fast exchange ...

It is possible to ask for say exchange in 4 weeks. If it doesn't happen then you can re-market it, you could even say you will continue to market until exchange.

Depends whther you would be really happy to sell at £250K.

Jowo_2

How long has your property been on the market and how many viewings has it had? What are other similar properties being marketed for and is the market flat in your area?

Forget estate agent valuation for one moment because these can be given to flatter the seller and encourage them to sign a sales contract. What are other similarly properties actually selling for at the moment?

Your desire to have achieve £x so you can buy a particular property in the future is irrelevant, your place is only going to sell for what someone is prepared to pay for it which may have nothing to do with the EA valuation or your plans.

Has the buyer demanded the property is taken off the market before the survey, for example? What's the usual process in Scotland for marketing and offers?

eattothebeat

Thanks so much for all the replies so far, I can't tell you how useful they are. Jowo, the property has been on the market for roughly a month and there's been about 18 viewings. I even had someone else offer £240,000.
The buyer put this offer in a week ago and I rejected it initially as I was told there was someone else wanting to view it who was very interested and even more so cos she knew about the offers. However, she saw it last night and it wasn't for her so that was when the estate agent asked me if I wanted to accept this other offer. I do now think that the EA had raised my expectations a big high on the asking price. I'm not sure if I will get offers through the 3%stamp duty price but perhaps with it being under offer and more viewings I might achieve a higher price. I'm not trying to be greedy at all, this property is like my gateway to us getting a bit of cash to buy somewhere, do it up a bit and maybe have some money left over for us to get married!

eattothebeat

BTW, I'm not a big of fan of gazumping, it doesn't exist in Scotland. What we do here is if you like a property you put in a note of interest. The property cannot then be sold without informing you first. When there are a number of notes of interest you go to a closing date where you are invited to put in an offer. It used to be a lot of properties were on a offers over and were going for about 20% over the asking price but now there's a lot more properties on at 'offers around x amount' and a lot more fixed prices than before. I think it's a much nicer way of doing things!

Jowo_2

I would have thought that some prospective viewers actually get deterred when there is an offer, rather than incentivised, as they don't want to become part of a bidding war.

It's the highest offer you've got to date, you've admitted that you think the estate agent is being optimistic, you now believe the stamp duty threshold is likely to depress the price, and I don't know what your area is like, but many parts of the UK have relatively flat markets, plus we are about to go into the quiet season from autumn onwards.

If you want to get married, as opposed to having a flash wedding, it costs next to nothing. Visit the Weddings forum on MSE for tips how to have a cheap wedding.

Lots of sellers come onto this forum having in mind a particular sum they feel they 'need' when they sell to realise some plans but this won't influence the price, particularly when they encounter buyers who don't feel they 'need' to pay anywhere near the asking price.

You said you'd be happy if you got 260k, an offer of 250k is around 4% off this, though I appreciate that it's around 12% less than the valuation (which you now think is inflated).

Is it a sellers or buyers market in your particular area for your type of property? In my area, tenement flats aren't shifting but family houses seem to have a better sales rate, presumably because they are scarcer and don't tend to attract scarce FTBs so demand hasn't tailed off so much compared to cheap flats and supply is less.

eattothebeat

The flat is in Shoreditch in London if that means anything to you. It is an ex-council flat in excellent condition, a really good buy to let opportunity. As they say, location, location, location. That is what I have been banking on. If it was the same flat in a different part of London I wouldn't get anything like the same amount for it. I'm taking into account it's really bear Old St Tube, a new tube line has opened just round the corner and it's at the edge of the catchment area for the Olypmics. I'm also selling with Foxtons who have a reputation of being pretty aggressive, have high commission of 2.5% + VAT. I went with them because they are like a selling machine and are known for getting you a good price for your property.