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Putting in 2 Simultaneous Offers

Dear All,
We have been house hunting for a while, and found two very similar properties, which we like very much (would be happy to buy either).

One property is on the market for £255-£285k (the estate agent told me that the vendor would not accept offers below £260), and the other is on at £250k.

Both properties have been on the market for some months. The vendors have already moved out of the first property, and I understand the vendor of the 2nd property has found a place, and is keen to move ASAP.

We are first time buyers, and have an AIP from Northern Rock for up to 90% of £260k (so £234k). We are in rented accommodation, and only need to give one months notice, which means we can move very fast if necessary.

Given that there is little to chose between the two, I was thinking of putting offers in on both simultaneously (probably £240k - does that sound like a reasonable opening offer?), and making it clear to the agents that I was doing this, and would go with the property at the lowest value.

Are there any disadvantages to this, and/or are there any legal ramifications? I believe that an offer is not binding, so there is nothing preventing me from withdrawing my offer (prior to contract)?

If the vendor of the first property does refuse to budge, we will probably go for the second property to save the extra stamp duty.

Thanks
Gopes
P.S. I did try to search the forum, but couldn't see anything relevant - but I am sure someone will point out that this may have been asked before.
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Comments

  • IR_Fudger
    IR_Fudger Posts: 10 Forumite
    edited 14 May 2011 at 6:23PM
    Yes, offer whatever you think is reasonable to however many people you fancy :)

    Letting the estate agent know your intentions may also help focus the minds of the vendors too and assist you in getting the best price. I would say that a £240k offer on a £250k asking price is a little on the high side. £230/235 will give you a bit of leeway if the vendors fancy bartering a bit, or maybe go even lower? £240 leaves you perilously close to paying asking price, and I don't know anyone who wants to be doing that these days. Just an opinion though.

    Good luck anyway!
  • Gopes
    Gopes Posts: 128 Forumite
    Thanks - that is helpful.
    Gopes
  • JQ.
    JQ. Posts: 1,919 Forumite
    Sounds like an excellent plan. However, as stated above it seems high for a first offer. This is the start of the negotiation and very few people will accept the first offer so you need to leave yourself room to improve the offer.

    Don't believe what the EA tells you, it's them that you are negotiating against.
  • harrup
    harrup Posts: 511 Forumite
    I don' think it's illegal ....but certainly frowned upon.
    I presume those 2 properties aren't on with the same EA? I can' envisage an EA telling the vendor "I've got an offer for your house here..but the buyer in question has also made a simultaneous offer on another property"

    If you were the vendor...would you even entertain such an offer? I wouldn't . I'd tell the EA to inform the buyer to come back when he made up his mind which house he actually wants to buy.
  • Gopes
    Gopes Posts: 128 Forumite
    harrup wrote: »
    I don' think it's illegal ....but certainly frowned upon.
    I presume those 2 properties aren't on with the same EA? I can' envisage an EA telling the vendor "I've got an offer for your house here..but the buyer in question has also made a simultaneous offer on another property"

    If you were the vendor...would you even entertain such an offer? I wouldn't . I'd tell the EA to inform the buyer to come back when he made up his mind which house he actually wants to buy.

    But what I want to do, is make it clear to both vendors, that I will be buying the house which will work out cheapest (they are with different agents). It is not me being indecisive - both properties are very similar, so I will end up going for the one that gives me the best price.

    But I do take your point, so will give it some more thought over the weekend.

    Thanks for your views.

    Gopes
  • FATBALLZ
    FATBALLZ Posts: 5,146 Forumite
    If you want to get a bargain putting in a lot of offers at the same time is definitely the way to go, many sellers expect buyers to pay over the odds so it's a bit of numbers game, the more offers you put in the more likely to are to get a good deal. It would take weeks if you only did one offer at a time.

    There are no legal obligations until contracts are exchanged.
  • myhouse_2
    myhouse_2 Posts: 553 Forumite
    500 Posts
    harrup wrote: »
    I don' think it's illegal ....but certainly frowned upon.
    I presume those 2 properties aren't on with the same EA? I can' envisage an EA telling the vendor "I've got an offer for your house here..but the buyer in question has also made a simultaneous offer on another property"

    If you were the vendor...would you even entertain such an offer? I wouldn't . I'd tell the EA to inform the buyer to come back when he made up his mind which house he actually wants to buy.

    There probably are vendors who would react in this way, but I don't think it's a rational reaction. The buyer doesn't need to decide which one he wants to buy. It's a buyers market and many vendors will be keen just to get a viewing never mind an offer. The fact is, the housing market is a market, only now it's the vendors who are competing.

    Personally I would prefer to be up front and open about it, and hopefully put some urgency on the sellers, but others might prefer to play it quietly to not upset sellers.

    If the property is on for £255-285, but they won't accept less than £260 then they've mispriced their property by £5k.
    Let us know how it works out.
  • catfish50
    catfish50 Posts: 545 Forumite
    Gopes wrote: »
    Are there any disadvantages to this, and/or are there any legal ramifications? I believe that an offer is not binding, so there is nothing preventing me from withdrawing my offer (prior to contract)?

    Presumably you'll want to make your choice before instructing a solicitor or surveyor. In which case there seems little difference between making simultaneous offers, or just making your offer on the first property, having made it clear via the EA that it's your final offer. If it's refused, go to the second one. What's the difference?
  • Gopes
    Gopes Posts: 128 Forumite
    catfish50 wrote: »
    Presumably you'll want to make your choice before instructing a solicitor or surveyor. In which case there seems little difference between making simultaneous offers, or just making your offer on the first property, having made it clear via the EA that it's your final offer. If it's refused, go to the second one. What's the difference?

    But lets say that I say offer £235k to the vendor of the 1st property, saying "its my final offer", and he refuses, meaning I go to the 2nd vendor with the same offer and he refuses also. It means that when I go back to the 1st vendor with an increased "final offer", I won't be as credible.

    By negotiating with both simultaneously, and being clear with both vendors, hopefully I am putting myself in a stronger negotiating position (assuming that one or both of the vendors don't take umbrage and refuse to listen to further offers from me)...

    Gopes

    P.S. Yes I would want to decide which property, before instructing my solicitor
  • catfish50
    catfish50 Posts: 545 Forumite
    Gopes wrote: »
    But lets say that I say offer £235k to the vendor of the 1st property, saying "its my final offer", and he refuses, meaning I go to the 2nd vendor with the same offer and he refuses also. It means that when I go back to the 1st vendor with an increased "final offer", I won't be as credible.

    I see.

    It's sort of like a "race to contract", only at a very early stage.
    By negotiating with both simultaneously, and being clear with both vendors, hopefully I am putting myself in a stronger negotiating position (assuming that one or both of the vendors don't take umbrage and refuse to listen to further offers from me)...

    Indeed. Personally I'd decline to accept an offer if I knew the buyer was simultaneously offering elsewhere. But someone else might react differently.

    Interesting.
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