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Help! How much to offer in a sealed bid?
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bhpric
Posts: 3 Newbie
Hello,
I am a (slightly anxious) first time house buyer - I'm a single mum and I'm hoping to take a chance on a property that will allow me to get on the property ladder. The house is a 2-bed, semi-detached, on the market for £265k and needs significant updating. Another home just up the street is the same in layout, except they've divided one of the bedrooms to make it a 3-bed, and it is on the market for £369k (but not moving fast). I think a more realistic price to sell that house quickly would have been £335-340k. Two years ago, this house may have sold for about £280k in good condition. This area is growing in popularity.
The house I want to buy was built in approximately 1945 (I think) - most of the interior d!cor, electrics and heating date from around the late 60s or early 70s. It has dated, worn carpet, peeling textured wall and ceiling paper throughout, v old electrics, old central heating that was cast aside at some point in favour of electric radiators, old bathroom fixtures - the toilet doesn't function. The kitchen appliances need removing and replacing and plaster (that was attached directly to the brick, is coming off the kitchen wall.
The house seems structurally sound - no discernible damp from below, but possible penetrating damp from guttering that needs replacing. The ceiling paper upstairs has some mould where the glue fixed it to the wall - but it doesn't appear that it is damp issue.
What worries me is that the date of the house and the extent of the work required may mean there is an asbestos problem - either with the boiler or the walls and ceilings.
The low price may be partly due to the fact that the front and back gardens were completely overgrown (to shoulder height) with ivy - to the extent that it grew into the lean-to (conservatory as the estate agents like to call it) and has pretty much destroyed it. The lean-to will have to be knocked down and re-built. But the vendor cleared much of the overgrown ivy except that covering trees and two broken sheds in the back - leaving much more work to be done - but you can see that the garden at one point was nicely landscaped. And there is a nicely sized front and back garden - the neighbours have a pretty lawn.
Finally, the cement garage behind the house has a rotted wood roof and broken, rotted doors and windows.
Any thoughts on what would make a good offer? 90+ people have viewed the property looking for a bargain - and it will be a sealed bid process. The estate agent called today and said they were having one last viewing tomorrow night and then accepting bids (slight extension from tomorrow's deadline - they said that some people wanted a second viewing). The vendor is selling as the executor of an estate and the proceeds are going to charity, which I believe means they will be obliged to accept the highest bid, over other good negotiating factors.
I think, that with a great deal of work, I could make the house habitable for about £25k - on a very tight budget and with a lot of hard work from myself (some obviously outsourced). The estate agent wanted to know what I was considering offering, and I said I was considering £285, and asked whether this is competitive. He said it might go a little higher, but that he couldn't really say.
I'd be grateful for some objective opinions on what might constitute a solid offer on the property. I may be able to offer more by borrowing from family. It's rare that this kind of opportunity comes up and I've been looking for a home for about 18 months, in which time property has unexpectedly and significantly increased.
I should mention it's in a great location - between where I work in one direction and where my daughter goes to school in another, and is in the catchment for the best local secondary school.
I am a (slightly anxious) first time house buyer - I'm a single mum and I'm hoping to take a chance on a property that will allow me to get on the property ladder. The house is a 2-bed, semi-detached, on the market for £265k and needs significant updating. Another home just up the street is the same in layout, except they've divided one of the bedrooms to make it a 3-bed, and it is on the market for £369k (but not moving fast). I think a more realistic price to sell that house quickly would have been £335-340k. Two years ago, this house may have sold for about £280k in good condition. This area is growing in popularity.
The house I want to buy was built in approximately 1945 (I think) - most of the interior d!cor, electrics and heating date from around the late 60s or early 70s. It has dated, worn carpet, peeling textured wall and ceiling paper throughout, v old electrics, old central heating that was cast aside at some point in favour of electric radiators, old bathroom fixtures - the toilet doesn't function. The kitchen appliances need removing and replacing and plaster (that was attached directly to the brick, is coming off the kitchen wall.
The house seems structurally sound - no discernible damp from below, but possible penetrating damp from guttering that needs replacing. The ceiling paper upstairs has some mould where the glue fixed it to the wall - but it doesn't appear that it is damp issue.
What worries me is that the date of the house and the extent of the work required may mean there is an asbestos problem - either with the boiler or the walls and ceilings.
The low price may be partly due to the fact that the front and back gardens were completely overgrown (to shoulder height) with ivy - to the extent that it grew into the lean-to (conservatory as the estate agents like to call it) and has pretty much destroyed it. The lean-to will have to be knocked down and re-built. But the vendor cleared much of the overgrown ivy except that covering trees and two broken sheds in the back - leaving much more work to be done - but you can see that the garden at one point was nicely landscaped. And there is a nicely sized front and back garden - the neighbours have a pretty lawn.
Finally, the cement garage behind the house has a rotted wood roof and broken, rotted doors and windows.
Any thoughts on what would make a good offer? 90+ people have viewed the property looking for a bargain - and it will be a sealed bid process. The estate agent called today and said they were having one last viewing tomorrow night and then accepting bids (slight extension from tomorrow's deadline - they said that some people wanted a second viewing). The vendor is selling as the executor of an estate and the proceeds are going to charity, which I believe means they will be obliged to accept the highest bid, over other good negotiating factors.
I think, that with a great deal of work, I could make the house habitable for about £25k - on a very tight budget and with a lot of hard work from myself (some obviously outsourced). The estate agent wanted to know what I was considering offering, and I said I was considering £285, and asked whether this is competitive. He said it might go a little higher, but that he couldn't really say.
I'd be grateful for some objective opinions on what might constitute a solid offer on the property. I may be able to offer more by borrowing from family. It's rare that this kind of opportunity comes up and I've been looking for a home for about 18 months, in which time property has unexpectedly and significantly increased.
I should mention it's in a great location - between where I work in one direction and where my daughter goes to school in another, and is in the catchment for the best local secondary school.
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Comments
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If this is in Englandbe prepared to accept that even if you win at a sealed bid you are still able to be gazumped. Happened to us recently.
In relation to what to offer, it sounds like you have done your homework. Offer what you can afford and what you think the property is worth taking into account what needs to be done. On the offer be clear about your offer, and the position you are in and how you can proceed.
Best of luck
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Last year we were looking at a house that was on for £525k. We submitted a bid for £495k. The EA came back and asked for our 'best and final' offer. We decided to ignore them and offered £500k. They rejected it, but we were able to submit a further offer (£510k) which was accepted. If we had fallen for the Best and Final offer we may have bid £525k or more thinking we had serious competition. In England the EA cannot refuse to pass on an offer, so don't tell them your maximum bid, otherwise you will end up paying that, when you might have got it for less.
It's not like ebay, where you place a maximum bid, you only end up paying it if someone else has bid you up to your bid.
One other thing, if the house is on for £265k, are you sure a surveyor will value it at £285k for mortgage purposes (if you need one)0 -
You seem to have given it an excellent once over so that's a great start.
My concern was when you said the toilet doesn't work. That teamed with the shoulder high garden made me wonder. If it is very run down there could be mortgage issues which could prevent you proceeding. The valuation is one thing, but if the state is so bad that it has no kitchen or bathroom facilities you can sometimes find lenders won't lend. Is it habitable? Are you stretching to a high ltv mortgage, eg 90%? If you've got a big deposit, eg 50% it won't matter as much.0 -
It's worth what your willing to pay, nothing more, nothing less.
No one on here can tell you what that figure is.0 -
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Last year we were looking at a house that was on for £525k. We submitted a bid for £495k. The EA came back and asked for our 'best and final' offer. We decided to ignore them and offered £500k. They rejected it, but we were able to submit a further offer (£510k) which was accepted. If we had fallen for the Best and Final offer we may have bid £525k or more thinking we had serious competition. In England the EA cannot refuse to pass on an offer, so don't tell them your maximum bid, otherwise you will end up paying that, when you might have got it for less.
It's not like ebay, where you place a maximum bid, you only end up paying it if someone else has bid you up to your bid.
One other thing, if the house is on for £265k, are you sure a surveyor will value it at £285k for mortgage purposes (if you need one)
That's really useful advice - thank you. It was getting rather stressful thinking that this is my one chance and so I need to bid the absolute maximum I can afford.
I'm not sure if I could find out whether a surveyor would value it that high - unless I win the bid and have a survey done. I suspect they already had a survey done - and if so, perhaps it's likely they put it on the market at the valuation price. I have a deposit, so the mortgage may still be available to me - but it does make me wonder if I have missed something major.
I have one more chance to view the property - I'll ask about the valuation and will reconsider the offer amount.0 -
You seem to have given it an excellent once over so that's a great start.
My concern was when you said the toilet doesn't work. That teamed with the shoulder high garden made me wonder. If it is very run down there could be mortgage issues which could prevent you proceeding. The valuation is one thing, but if the state is so bad that it has no kitchen or bathroom facilities you can sometimes find lenders won't lend. Is it habitable? Are you stretching to a high ltv mortgage, eg 90%? If you've got a big deposit, eg 50% it won't matter as much.
I don't think it could be considered habitable. The water is running, but there is no functioning kitchen - just a sink. There is damp in the kitchen - it's come through the wall because of the broken guttering. And the toilet doesn't seem to be working.
If I lowered my bid by about £10k, I could possibly do 80% LTV. Perhaps I should inquire with the bank?0 -
If you are stretching yourself to buy the place, do you have funds in place on top to do the renovations? It sounds like it might be a bit too much to do.0
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I am also thinking that with the condition, the seller would probably be inclined to accept an offer from a developer who is either cash buyer or large deposit, rather than a FTB who may end up unable to proceed further down the line
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