Best and final offer

tranquil_2

Hope someone can help!

We've found a house that we'd like to buy, spoke to the estate agents selling it today and they've asked for best and final offers by Saturday noon.

The house is lovely but needs considerable work doing on it, some of it I've been able to cost out but some of it, for example there are serious concerns about the drains, will depend on the survey for the extent and cost of.
The house is at the top of our budget already (wasn't marketed as needing work doing, viewed it and fell in love!) so we won't be offering asking price anyway.

I'm assuming that best and final bids are the same as sealed bids. Is this the same as putting in an offer (i.e. dependent on survey) or the same as an auction (i.e. once offer accepted that's it, too late).

We've sold and our buyers have sold to FTB, we have our mortgage in principle (I think- spoken to the company we're with already who have agreed to lend us more money to move and given us a reference number but did it over the phone so not got anything in writing yet).

Questions I'm asking are:
Any advice about best and final offers, and on putting them in?
Our offer is based on work to be done. If the survey comes back as worse than expected could we still negotiate on price?
We know there is an issue with the drains but not how big an issue. How do I cost that into our bid (do I ignore it and then negatiate after we've had survey done, acknowledge it and guess at how much it might cost but am likely to be way out, or something else?)

Any help appreciated. Thanks in advance

lynzpower

Best and final offers are sealed bids.

To be honest with you, where I work, we are looking at sealed bids going at least 10k over asking price.

We wqork on the premise that, yes, we know the property needs work, and the property to a certain degree is sold as seen, ie, you couldnt renegotiate massively afterwards cos you know theres work to be done, it would only be negotiable at the point where a surveyor tells you something you coulndt have predicted yourself ( eg the place needs new windows)

Not only is the amount of money an issue in sealed bids, but your position. f you are a cash buyer for example, you are ina much better position than a mortgage property.

If you are going to go in you need to put in
a) your best & final price
b) the fact you realise that various works need to carry out & this is reflected in the price you are willing to pay
c) whether you are needing a mortgage
d) if so what your deposit is
e) any other info that you feel relevant ( ie you have cash set aside in case the lender puts retainers on your mortgage pending work being completed)

Hope this helps
Lynz
x

tranquil_2

Thanks Lynz,

We've been and checked out how much the other properties on the road have gone for and it's priced about right for the size of house, if it was in good nick. Although it doesn't have the views or large garden others on the road have (been on Google earth and checked out backgardens)

Although there are obvious problems (needs new central heating, re-wire), other problems are ones that weren't obvious to us, but when we went back with my Dad he spotted them. It looks like the drain at the front is blocked as the rainwater pipe from guttering has been diverted into another drain (sorry if terminology wrong). There are huge trees at the bottom of the garden, my friend who is a gardener thinks it may be the roots have pentrated the drain system but couldn't be sure unless a full survey , one where they put cameras down, was done. Sewage pipe from downstairs toilet is above ground, which my Dad says should be buried, but it was hidden by slabs. Tiles leaning against the wall covered crumbling brickwork. Conservatory flashing is sticky tape. Chimmey is leaning. There is alot that needs doing but it is all do-able.

I was hoping that with the amount of work that needed doing, it might go for under the asking price. Hadn't thought about over the asking price. To be honest if it had been marketed as needing work we wouldn't have been to see it, as it is at the top of our price range. Oh well. We'll put in what we can afford but won't get our hopes up!

vansboy

Taske notice of what Lynz said - especially about retentions.

If your bank hold back, say £10000 till the work is done, you'll need to find & finance it TWICE over, once to make up the shortfall on mortgage & to pay the builder. So you'll have interest to pay, till the bank releases the full amount.

Have you checked & double checked, the guesstimate cost of putting things right? We're in a sort of similar position, but each time we try to re-work figures, the cost goes up - not down!!

& as other Moneysavers suggested, in my previous thread, were we being realistic in what NEEDS doing & what we WANT doing - you can't really expect to knock off the cost of repainting something blue, just 'cos they have it green!! But it sounds like yours has plenty of stuff that NEEDS sorting!!

Wish we could get our seller to agree a price that he'd accept, we still don't know how much he REALLY wants. So it's just up to you to offer your best, but don't put yourself in a really stretched position - just in case something else needs doing, once you've bought it!!

Good Luck!!

VB

lynzpower

Maybe in this circumstance the reason why the EAs are going for sealed bids is to determine positions. ( as well as to get as much money for the vendor as poss)

IF as vansboy & I suggest there is an issue with your lender over retentions, this puts you in a weaker position than a cash buyer/experienced developer, in terms of you might get half way through the sale, cost up the work properly, the mortgage co goes Ooooh we'll put retentions on, and you guys pull out, costing everyone involved time, money and a whole pile of stress.

IF you are committed to this sale, then get your proverbial ducks in a row, speak to your lender about retentions, get a builder round and get QUOTES, not estimates, and make a clear decision as to whether to proceed.