Ready to make offer, want to avoid bidding war.

machofairy

We have just seen a house that has only been on the market a few days.
We are ready to make an offer for it.
EA is asking for "Offers in excess of £200k"
We feel the house is probably worth about 10% more that that.

However, we do not want to go into a bidding war with other potential buyers and push the price too high.

Can anyone offer any tips on what starting offer to make, and when to say enough is enough?

Thanks in advance

ginger_nuts

you could register your interest in the house and then put your bid in when everyone else has done there bidding .

leftieM

That's the way to do it alright. Don't effectively bid against yourself. However, you can't expect a bargain. If bidding 'pushes the price up' then that is the market value. Why should a vendor sell their house to you for less than they could get if they let it bid?

HugoSP

When you go to bid, put some ducks in order.

Be ready with the following:

Solicitor's details
Mortgage details - letter confirming funds are in place subject to survey etc.
FTB, or good position with your sale - ie contracts ready for exchange etc.
A draft contract/deed may stand you in good stead.

This is part of some good advice offered by Location Location Location's Kirsty Allsop. She admitted to liking sealed bids because she could promote her client's ability to proceed. It's not necessarily the highest offer that will get the deal but can be the person most likely to proceed with the sale.

I put in a bid on a house that I knew to be lower than the highest bid. However I promoted my ability to proceed. In this case I was unsuccessful, but I would have completed a lot sooner than the top bidder did. Although the sale did go through in the end the vendor did indicate that he wished he had gone with my bid on one or two occasions. The vendor is a personal friend of ours, but we both knew that friendships have to take a back seat in these circumstances.

machofairy

We are actually in a good position to buy. We have a mortgage promise from a broker affiliated with the EA already, and are FTB with funds ready.

Based on the advice above, should I "register my interest" by making an offer low enough to be decent, but maybe not accepted, then if the EA says there has been a higher offer later, I will stall them and ask EA to let me know at the last minute before the vendor accepts the final offer?

The problem is, there is also another house we are interested in, which is our 2nd choice. If we wait till the first choice falls through before making an offer on the 2nd house, it may be gone by then.

leftieM

Your plan is a good one.
As for the problem with two houses - well, I'm afraid that is a gamble you have to take! You can offer on both and withdraw one offer if you get the house you want, if that's possible. I know it's not the most ethical thing to do but I know it's very common here (Belfast) at the moment because the market is so desperately competitive.
You have to look after your own interests. Good luck!

loulou41

I will stall them and ask EA to let me know at the last minute before the vendor accepts the final offer?

Did not work for me, EA refused to do it, and told me if I do not make a higher offer he is not going to let me know of any other offers? I was prepared to top up my offer if only he had told me what the other buyer was paying. I still regret it now I have lost the house I like due to EA being difficult. His colleague phoned me a few days later and told me the seller will sell to me for an extra 3k and I told him I will get back to him. I took my time and without geting back to me, the house was sold, I only knew about it when it was withdrew from the market. I still think EA should have informed me of his intention. As it is, they are the main EA in that area, and I dread having to deal with them again. It was meant to me and it is nearly a year now and am still looking.

leftieM

Loulou, from reading your post, the ball was in your court ie you had been contacted and you didn't get back to the EA with your decision on whether to buy the house at the offered price or not. From the EA and vendor's perspective, this was probably seen as a lack of interest. No news is bad news when it comes to offers on houses from a vendor's point of view. I know you feel that you didn't have a chance but to them, by not ringing back with your decision, you were saying 'no'.

HugoSP

I think you have to have some answers ready when you're in a position such as loulous's.

Know the top price you'll go to etc. This will help you make some decisions before you're put on the spot.

This way, if someone comes back to you and says " It's yours for another £3k" and you could go up another £5k, then you know what your response will be straight away. BUT DO NOT respond straight away!

Ask to be given a few hours etc, or find out how long the vendor will wait for a response, to talk it over with partner etc then come back to them in a timely manner and present your 'considered' response.

It's all about positioning yourself for the negotiations. Loulou may not have lost her house if she considered the likely scenarois.

I have dealt on this basis a few times and it has stood me in good stead. The EA ony has reason to think you're going away to speak to mortgage brokers, partner etc but in reality you know that you can afford it and are playing it cool.

In the cases that the increase has been above what we could offer then I do exactly the same and come back with a figure slightly less than our max - to try and open up negotiations, and presenting our case as well positioned buyers to see if the vendor will trade price for certainty.

layercake

HugoSP wrote:

When you go to bid, put some ducks in order.

Be ready with the following:

Solicitor's details
Mortgage details - letter confirming funds are in place subject to survey etc.
FTB, or good position with your sale - ie contracts ready for exchange etc.
A draft contract/deed may stand you in good stead.

This is part of some good advice offered by Location Location Location's Kirsty Allsop.

I'm in a similar position to machofairy. First time buyer, looking at a property around 120k mark and ready to put a bid in. But for a lower amount.

I will shortly have a mortgage promise, but I have a few questions???
-Should I get a mortgage promise for say 117k and show the EA that, and keep going back to the Building Society for more on the mortgage as I raise my bid?
-Do I just need to introduce myself to the solicitor and get his card to drop off to the EA?
-As an FTB should I have a draft contract? If so what details should it contain?

Thanks

machofairy

I have been in a similar position to loulou's. EA said our first offer was rejected and I said I'd think about making another offer. One week later, when I called to amke an improved offer, they said the house was sold.

This is exactly the situation we want to avoid this time.

Layercake,
From my recent experiences, EA is not really interested in your mortgage promise or chosen solicitor. They are more keen to sign you up with their own mortgage services. My response has been " I may register with you when I get an offer accepted". Be aware though, they may have good exclusive mortgage deals but they are also there to vigourously push their insurance services, which are not competitively priced.

I thought the contract is standard and written by the conveyancer? DId you mean offer letter? Likewise, the local EAs here are not interested in a written first offer, just want it verbally. Presumably this is to cover them in case they accept and then reject the offer.