I offered too much for a house. What now?

dominoman

I have been looking for a house for a couple of months, and last week saw one I liked.

I offered 540 for this one. That was 40k over the asking price, but the agent told me there was lots of interest and a couple of other offers over asking that had been declined. The agent also told me that a neighbouring identical house sold for 560k, but I later checked and found out that one was over 20% larger, plus had a parking space.

My 540k offer was accepted, but now I think I have overpaid. I researched and found out that identical houses in the street have sold for 30-40% lower prices in the last year.

Obviously I know this is all my fault, but I got carried away by the frenzy and by the agent's tactics to make me pay more.

What can I do? I still love the house and haven't found anything else, but feel I am overpaying by at least 100k.

monty-doggy

Well surely the valuation and survey will flag this up and give you an option of negotiating the price? You don't have to go through with the sale either.

richardw

Withdraw your offer and wait and see if the EA gets good offers from others or calls you.

DaftyDuck

Having offered £540k, I don't think you will succeed in negotiating the price down to where you will - in the long term - be happy. I'd pull out. The agent may come back to you, but I feel it is unlikely you'll get this house at a price you will be content to pay.

pinkshoes

Do you love the house to pay £100k more than it's potentially worth?

Are you planning on living in it forever?

How long have you been house hunting for?

Until you have exchanged contracts, you can do whatever you like!

Chances are, the valuation may come back at say £450k, so your mortgage company might not lend you enough. Have you got an extra £90k+ cash to pay the extra?

kBHX

If you do withdraw your offer at this stage then I'd expect the vendor not to take you seriously as a buyer. Although you are well within your rights to do so if you feel you've overpaid.

Perelandra

Agree with what the others above have said.

I'd also add that if you do decide to pull out, it would be fairer on the vendors to do it as earlier rather than later so that they can put it back on the market, and not take any decisions themselves on the assumption they're getting 540k.

DaftyDuck

... and, since they are unlikely to budge £100,000, you might as well pull out before you incur costs.

jimbog

You based your offer on this:

The agent also told me that a neighbouring identical house sold for 560k, but I later checked and found out that one was over 20% larger, plus had a parking space.

So, in light of the new information, the agent obviously made an error so I would contact the agent and point out just how frustrating this has made both you and the vendor - and consequently you will revise your offer in due course

richardw

kBHX wrote: »

If you do withdraw your offer at this stage then I'd expect the vendor not to take you seriously as a buyer.....

Good point. Perhaps consider a withdrawal and best and final offer via your solicitor with a forecast timescale for the transaction and details of your funds.

sirmosh

jimbog wrote: »

You based your offer on this:

The agent also told me that a neighbouring identical house sold for 560k, but I later checked and found out that one was over 20% larger, plus had a parking space.

So, in light of the new information, the agent obviously made an error so I would contact the agent and point out just how frustrating this has made both you and the vendor - and consequently you will revise your offer in due course

This is great advice in my opinion. Tell them you based it on the incorrect information they gave you and that they are to blame for your over valuation.