What to offer in sealed bid?

kiden

I'm getting into a real stressed state trying to work out what to offer on a property the deadline is tomorrow noon (I know I've left it a bit late to ask for help )

• Originally put on the market at 350k (bungalow, 2-3 beds, kitchen, living room, bathroom, garage, large garden, open fields at front, non-estate, not overlooked, working oil-fired ch, electric cooker and shower, water, needs redecorating/modernisation, great potential to extend/improve).
• Agent (small agency) has told me eight ppl booked to view, six turned up (apparently it's often quiet during half-term).
• Of those, four are interested.
• One of those offered asking price straight away.
• I said I would match.
• Agent rang the others to discuss their offers.
• Came back to me and said he thought one was out of the running, but 2 remained interested and wiling to offer over (and were proceed-able, like me, although he said 'but obviously we'd need to check that more thoroughly at the time', plus he said one's a builder wanting to live more rural).
• In order to be fair, he was taking it to sealed bids, and sent a form saying 'We have number of people who are interested, offers, no-lower than the asking price, and some above the asking price have been submitted.'
• I asked him if he could give me any indication, which he said he couldn't as he's trying to be fair to all three of us. I started sounding despondent, and saying 'well, keep me on your books if anything else comes up', which he countered with 'well, you haven't lost it yet'
• He continued to say that he couldn't tell me what figures the others had mentioned, but said that - although I shouldn't take this as indicative - if someone offered, say, 380 and I offered 375, it might still be mine if the sellers felt that was a better sale.
• He did say that an offer 'close to the asking price' wouldn't be enough.

I'm hesitant to put the link to the property

I'm oscillating between taking a risk at 367,500 and going to 375,500 (or even 377,500) - I can afford the latter (it's about £50 more a month on a mortgage), but wonder if I'm jumping too high based on the conversations so far..?

There are things I don't like about it - I love victorian/edwardian, and it's 60s, but I love rural and I think I can make it beautiful based on this inspiration http://www.homebuilding.co.uk/completedprojects/thoughtful-remodel# (though it's not this big!)

Any last minute advice would be appreciated.

Reue

Ignore everything the estate agent said; they work for the vendor, not you.

Offer what you think is fair for the property. Personally if I made an offer which was rejected because they wanted to go to bids I'd keep my offer as it was. I don't like to play bidding games.

pyueck

kiden wrote: »

I'm getting into a real stressed state trying to work out what to offer on a property the deadline is tomorrow noon (I know I've left it a bit late to ask for help )

• Originally put on the market at 350k (bungalow, 2-3 beds, kitchen, living room, bathroom, garage, large garden, open fields at front, non-estate, not overlooked, working oil-fired ch, electric cooker and shower, water, needs redecorating/modernisation, great potential to extend/improve).
• Agent (small agency) has told me eight ppl booked to view, six turned up (apparently it's often quiet during half-term).
• Of those, four are interested.
• One of those offered asking price straight away.
• I said I would match.
• Agent rang the others to discuss their offers.
• Came back to me and said he thought one was out of the running, but 2 remained interested and wiling to offer over (and were proceed-able, like me, although he said 'but obviously we'd need to check that more thoroughly at the time', plus he said one's a builder wanting to live more rural).
• In order to be fair, he was taking it to sealed bids, and sent a form saying 'We have number of people who are interested, offers, no-lower than the asking price, and some above the asking price have been submitted.'
• I asked him if he could give me any indication, which he said he couldn't as he's trying to be fair to all three of us. I started sounding despondent, and saying 'well, keep me on your books if anything else comes up', which he countered with 'well, you haven't lost it yet'
• He continued to say that he couldn't tell me what figures the others had mentioned, but said that - although I shouldn't take this as indicative - if someone offered, say, 380 and I offered 375, it might still be mine if the sellers felt that was a better sale.
• He did say that an offer 'close to the asking price' wouldn't be enough.

I'm hesitant to put the link to the property

I'm oscillating between taking a risk at 367,500 and going to 375,500 (or even 377,500) - I can afford the latter (it's about £50 more a month on a mortgage), but wonder if I'm jumping too high based on the conversations so far..?

There are things I don't like about it - I love victorian/edwardian, and it's 60s, but I love rural and I think I can make it beautiful based on this inspiration http://www.homebuilding.co.uk/completedprojects/thoughtful-remodel# (though it's not this big!)

Any last minute advice would be appreciated.

IMHO sealed bids are a device to get people to feel panicked and overpay. Let me guess the agent is telling you about all these other interested parties offering more and more in a crazy bidding war. Ignore the whole 'sealed bids' thing. Put in an offer you think is reasonable. Ignore any 'deadline' there is no way that if you offer the best price a day after the deadline they won't go with you.

Also the 'sealed bids' process in no way guaranteed that the best offer will be taken or that the winning bidder is under any more obligation to buy the place than for any other sale.

If somebody else offers crazy money walk away!

Hoploz

It depends how much you want it and how long you want to stay. For me I have been prepared to bid as much as I can afford, in order to secure a lifelong forever home which was ideal and I had been searching two years for. I was prepared to offer what I refer to as 'next year's price' simply because due to the nature of the search and lack of available properties I knew I would still be searching in a year's time anyway. I will be staying here for at least 20 years so the odd 10 or 20k will be irrelevant when I retire and it's worth 5 times what I paid.

Can you say the same about ths house? Is it a rarely available perfect forever home? Is there plenty of other similar housing stock? You've already said there are things you're not that happy about. Will you stay in it long term?

Only you can decide what it is worth to you. A little extra on the mortgage is fine as long as you won't have a problem borrowing the extra. (assuming interest rates remain low) But if you decide to sell in a year or two and prices haven't gone up yet then you don't want to find yourself in trouble.

AdrianC

Simple answer? You need to offer just enough that the vendors think yours is the best bid.

The only way to know what that is is to know what the others are bidding, and how they fit the vendors preferences from a buyer...

Whatever you do, don't be pressured into bidding more than you think the house is worth to you.

pyueck

Hoploz wrote: »

It depends how much you want it and how long you want to stay. For me I have been prepared to bid as much as I can afford, in order to secure a lifelong forever home which was ideal and I had been searching two years for. I was prepared to offer what I refer to as 'next year's price' simply because due to the nature of the search and lack of available properties I knew I would still be searching in a year's time anyway. I will be staying here for at least 20 years so the odd 10 or 20k will be irrelevant when I retire and it's worth 5 times what I paid.

Can you say the same about ths house? Is it a rarely available perfect forever home? Is there plenty of other similar housing stock? You've already said there are things you're not that happy about. Will you stay in it long term?

Only you can decide what it is worth to you. A little extra on the mortgage is fine as long as you won't have a problem borrowing the extra. (assuming interest rates remain low) But if you decide to sell in a year or two and prices haven't gone up yet then you don't want to find yourself in trouble.

Hoploz nobody has any idea what your house will be worth in one year or in 20 years. Your prediction of 5x current prices is just that a prediction. Please make sure you caveat your predictions.

Hoploz

It's not a prediction, it's just my opinion. And my money. And my house.

I have advised the OP to consider the options.

pyueck

Hoploz wrote: »

It's not a prediction, it's just my opinion. And my money. And my house.

I have advised the OP to consider the options.

Great thanks for clarifying. My issue was when you say 'next years prices' this implies an inevitability to the prices rising. This can create a dangerous position where a bidder pays more than market value, prices actually fall and the OP risks being in serious negative equity.

In any case if you overbid you likely will get your mortgage application rejected.

dgtazzman

Seeing you want to get a mortgage on the place, I would be very reluctant to go(much) over asking price, especially if you are now already saying the property isn't perfect.

Bid too much and the lender might not agree, leaving the whole thing to come falling down in a later stage, probably after you have paid out quite a bit of money for fees, surveys, etc.

jimbog

Offer £265K - £15K over the asking price is enough

kiden

Thanks so much for your answers - it's really helping bring me down from the panic I was getting into (there's just me making this decision ).

It turns out I probably would have overbid: I've just spoken to the agent and he's now saying that there's probably only two of us in it (maybe three), and although he really doesn't know what will come in tomorrow, if he had to guess he'd say 360-365. That already feels much better to me

He also said that if the offers were close, he'd probably come back to me anyway, as he's a simple man and would try and convince the sellers of the benefit of going with someone as proceedable as me over a higher offer (which implies maybe the others aren't as proceedable after all...).

He's also said he hates doing sealed bids, and that if I want to call him again tomorrow morning, that I should go ahead - call him as many times as I need to.