Making an offer - rejected..........

phoebe1989seb

Hi folks,

We have today made an offer on a house we viewed two days ago. It is in a village on the Dorset/Wiltshire border.

We know that the house was previously up for auction (end of 2010) but didn't sell. The auction guide price was £230,000, but we don't know the reserve - although guessing it was around £250,000 from what the estate agent showing us over said.

Shortly after the auction the guide price was increased to £265,000 which is what it stands at now.

Based upon the fact that the house is part way through a programme of renovation and is being sold unfinished, we put in an offer of £245,000.

The EA (not the same one who showed us over but one of his colleagues) said another buyer had offered £250,000 but was unable to get finance because the house is considered uninhabitable by the mortgage company.

We have accepted an offer on our house and are close to exchange with a projected completion date of mid-late May. When our sale has gone through we will be cash buyers with no mortgage necessary for the purchase. Despite this, when we made our offer the EA was very condescending and said 'oh, so you're only under offer........we have other interested parties who are in rented and are thus in a better position to proceed.'

We appreciate this and understand that the better position you are in, the more seriously your offer will be considered, but let's face it many people placing an offer will not have exchanged on their own sale.

The EA went on to say that the buyer who couldn't get the finance is still in the running and that they have further viewings lined up for today and tomorrow (one of whom is another cash buyer) and that they are expecting to receive an offer on Monday............how he can know this I can't comprehend

We think he is probably just trying to get us to up our offer, which we could do, although obviously we don't want to pay over the SD threshold - or get into a bidding war

What would anyone suggest please - I should say this house is in a good village, although not the prettiest in the world, and we are looking at it being our forever home. It is, however, on a busy A-road which I would have thought would not be to everyone's liking.

Many thanks in advance xxx

The_Drama_Llama

The EA is trying to get you to up your offer by spinning tales (which may or may not be true) about other buyers.

I would suggest you stick to your guns. But also be really really sure you want to buy a house which a mortgage lender has refused to lend on.

westernpromise

I'd go further than that, I'd drop the offer.

Tell them best of luck getting other offers, you'll check back with them in a month, and if it's still unsold at that time, you'll make a new offer which will be lower than the one you just had rejected.

Make it clear that, having been rejected, your offer is now withdrawn. It does not wait there unchanged while the vendor hawks his place around and tries to do better. If he does that and fails - your offer reduces.

He can have £345k from a cash buyer today. Or £325k from the same cash buyer in a month if he mucks you about.

Their move.

BornAtTheRightTime

Explain to the EA when he calls back to see if you are upping your offer that upping your offer won't change the fact that you haven't yet exchanged on your purchase. See if he agrees with you and advises you to exchange quicky so that he can put your offer forward in a good light, or if he quickly changes his tune and encourages you that with an increased offer being 'only' Under Offer won't matter.

If the former, he's probably been fairly truthful to you so far. If the latter, you can be confident that he is just using sales tactics to get your top offer out of you.

phoebe1989seb

The_Drama_Llama wrote: »

The EA is trying to get you to up your offer by spinning tales (which may or may not be true) about other buyers.

I would suggest you stick to your guns. But also be really really sure you want to buy a house which a mortgage lender has refused to lend on.

Thanks Drama Llama - that's what we thought. The EA told us to call him on Monday to see what the position was concerning the offer he maintains they are going to receive...........trouble is he can make anything up to get us to increase ours, although as I said we're not prepared to go above £250,000 how ever much we like it.

Regarding the other prospective purchaser's inability to get a mortgage on it......I think it is because the house is seen as being uninhabitable although it does have a rudimentary kitchen and bathroom plus a newly installed heating system. Most of the rooms are stripped ready for decoration and there are bare floors (some of which are quarry tiled).

It has had a new roof and wood treatments etc as well as some of the wiring - new consumer unit etc, so is not as bad as it sounds - just lenders being over-cautious, I guess.

We previously bought a house which was unmortgageable - thanks to parents lending us the cash - and turned it into a fabulous home which when sold 10 years later had increased in value five-fold (obviously partially as a result of the property boom but also because of our handiwork and attention to detail), so the work etc required doesn't put us off. Also as we're not looking for a fast turn around or to make a profit in a hurry we are happy to take it on as a labour of love!

harrup

The_Drama_Llama wrote: »

I would suggest you stick to your guns. But also be really really sure you want to buy a house which a mortgage lender has refused to lend on.

What DramaLlama said but it big neon letters!

phoebe1989seb in view that this is your envisaged "forever" home, think REALLY carefully whether a house which didn't sell at auction ( no one of the locals familiar with the area wanted to live or move there?) and which is on an A-road is truly what you want. Just in terms of it's re-saleabilty if you DID want to move on from there.

From what I understand you don't know the area well, you may well discover a preferrable village or property in due course.....and houses adjacent to a busy road are a bear to sell. People with young kids are leary of them, people with pets don't want them, any one sensitive to noise will shy away from them, etc.

phoebe1989seb

Thanks very much for all the comments guys

I love westernpromise's idea of dropping the offer and may well try that - I really don't have much faith in what these EAs say right now so feel they deserve a bit of their own medicine.

BornAtTheRightTime - I love your suggestion too - it makes very good sense and may well give us a better idea of how honest they are/how much they'd say anything just to secure the offer required.

Harrup - you're right about the road - it's the main 'against' on my list of 'fors and againsts', but otherwise this house has so many 'fors', that I don't know if I'd be silly to rule it out merely because of the road. Of course one doesn't know how one's situation will change over the coming years and we may well decide to move again in time, but for now it does seem to be perfect 'forever home' material - with that one exception

In the meantime we've gone ahead and offered on the other main contender. That was on at £280,000, previously £295,000, and they have after a bit of dithering (we went in with a very cheeky offer of £240,000 as it definitely needs more work and is the one with pub buildings encroaching into the back garden), they have accepted £244,000

Only trouble is, their keenness to accept such a low offer has now started alarm bells ringing as in comparison to the other one this seemed so simple. It is a sale as a result of a marriage break-up though and the house does need a whole programme of renovations, plus is grade 2 listed.............so not for the faint-hearted. On the plus side, it's in a much prettier village than the other property, but for some reason I'm still being drawn back to that one................

Guess at least we've had an offer accepted and the other one is not out of the equation yet.

westernpromise

Great, you've now got an even better story to tell. The vendor forgot he was competing for your £245k with more reasonable sellers, so you've walked because you've found one of them.

So you very politely say Look: if something's on at £265k, I offer £245, and a month later he hasn't bettered that - then it's possibly overpriced at £245, never mind £265. So obviously at that point my offer if anything goes down, not up.

Be very polite and explain the above in the interests of being transparent. You're there and ready to buy and you've got an alternative, so he needs to get a bit worried and come towards you.

If he's right and the house really is worth £265k, you lose nothing because you haven't got £265k but someone else will pay it. If he's wrong, then rattle his confidence a bit and put some pressure on him.

tleefox

phoebe1989seb wrote: »

trouble is he can make anything up to get us to increase ours, although as I said we're not prepared to go above £250,000 how ever much we like it.

You've hit the nail bang on the head with that - and have answered your own question. Don't forget, the EA is employed to represent the seller, not you as the buyer.

I would call his bluff, withdraw your offer, leave him your phone number and see what happens.

westernpromise

Yep, get the vendor angry with his agent. He's paying them, why aren't there more offers coming in? Why isn't he getting to play buyers off and bid against each other? why's he being told it's worth £265 when the only offer they've surfaced is £245 and not a penny more?

Make the !!!!!! sweat!

phoebe1989seb

westernpromise wrote: »

Great, you've now got an even better story to tell. The vendor forgot he was competing for your £245k with more reasonable sellers, so you've walked because you've found one of them.

So you very politely say Look: if something's on at £265k, I offer £245, and a month later he hasn't bettered that - then it's possibly overpriced at £245, never mind £265. So obviously at that point my offer if anything goes down, not up.

Be very polite and explain the above in the interests of being transparent. You're there and ready to buy and you've got an alternative, so he needs to get a bit worried and come towards you.

If he's right and the house really is worth £265k, you lose nothing because you haven't got £265k but someone else will pay it. If he's wrong, then rattle his confidence a bit and put some pressure on him.

Thanks WP.......will definitely do as you suggest