Advice on best and final offer

Brucealmighty

Hi everyone,

I've been reading these boards for the past couple of months, but this is my first post so please be gentle . I am after some advice.

My husband and I have been looking to buy for a month or so. We've viewed 5 houses and seen one that we liked enough to make an offer. The house came on the market just over 2 weeks ago. We went to view it last Saturday at an open day (we were told by the EA this would be the first opportunity for anyone to view). We made an offer on it that afternoon. The asking price is £290000, but no houses of a similar type and size have sold on the street for more than £285000. It's a decent solidly built house, but needs some work (new kitchen, removal of dodgy lean to utility and total re-decoration), so we put in what we thought was a fair offer of £270000. The estate agent called back 2 days later to say that the vendor had had other offers and would like our best and final offer by tomorrow.

We decided to go for a second viewing before making our final offer. At the viewing we asked the EA how many other viewings/offers the vendor had had. The EA said 35 viewings (really?! In 5 days!) and 10 offers. She also said any offer we made would have to be over £300,000 as the vendor had received 3 offers over asking just that morning.

I'm afraid we lost our poker faces a bit at this point. My husband politely pointed out (but obviously slightly annoyed) that since no house had sold for anywhere near 300,000, the vendor was perhaps being optimistic and did the EA not realise that our opening offer was no where near this amount. I think the EA sensed we weren't happy and started saying we should still put in an offer, that the sales often fall through and that the bank is will probably decline the high bidders mortgages on valuation etc etc.

My question is how much, if any, of the EA's story would you believe and what amount do you think we should give as our best and final. We really think the house isn't worth more than 275000 in its current condition, but don't want to go in high if we could get the house for less.

Thanks very much for any and all advice offered!

blueblazer

Doesn't sound like you have fallen head over heels in love with the house so I'd have thought offer what you feel it is worth and either someone has overpaid and it is their problem or they will come back tail between their legs to you.

(Obviously this depends on where the house is and how many other similar houses are available)

KRB2725

If you really want the house then offer 275 as your best & final. You could stick to 270, but how would you feel if someone else got it for 274?

Ignore anything the estate agent says, offer what it's worth to you.

lottie3000

Defiantly ignore the estate agent. If the house isn't worth the money then a mortgage valuer wont value it at rhat much.

kinger101

You mention that no house has sold for more than £285K, but when was this? If it was last year, then in most areas, over £300K would be normal.

Do you research and come up with a figure you're happy with. There is an element of truth in what the EA is saying about about the bank valuation. If they feel the offers are above what they were expecting, this is always a risk if someone is unable to make up the shortfall or go for a different LTV and higher mortgage. Someone with only £31K deposit on a £310K offer would be stuck if the bank valuation came back at £290K. Of course, many people aren't willing to pay above the valuation anyway.

If you're not that interested in it, stick with your original offer.

Brucealmighty

Thanks everyone for your replies. Kinger- other similar houses have sold in the area in the last 3-6 months for between £268000 and £285000, the most recent on the road in question for £275000 (same type of house we're interested in but with extended kitchen and much. much smaller garden, so sort of evens out to my mind?). There is the odd house that's gone for over £300,000, but these have been heavily extended and modernised, with bigger plots.

Think we'll take others advice and ignore the estate agent and put in a best and final offer of £275000. We think this is what the house is worth. On the other hand perhaps there really are 10 other buyers who are ready to pay silly money!

Jhoney_2

Brucealmighty wrote: »

Hi everyone,

The asking price is £290000, but no houses of a similar type and size have sold on the street for more than £285000. It's a decent solidly built house, but needs some work (new kitchen, removal of dodgy lean to utility and total re-decoration), so we put in what we thought was a fair offer of £270000.

For arguments sake let's start with this. Do you think it would take 15K to do this? Is the property in disrepair? if not, why should the price be reduced for your desire for a new kitchen and to redecorate? Lean to issue removal will cost < 1K including skip.

How Fair? You want a bargain and vendor wants a profit or enough to move on. Best and final should be 274 by your reckoning of 275 value, but it's your call and it depends on how much you want it.

Hope it works out well.

Freeraine

I suspect that the other would-be buyers who have gone beyond the asking price, will have put in offers 'subject to survey'. Once they are on firmer ground, they will negotiate down the price, based on the findings of that survey and/or quotations from builders/electricians etc.

The Estate Agent has probably valued the property based on sales of similar properties in the past 12 months, plus the percentage rise in local housing market. (£285K plus 1.5% roughly= £290K).

You have offered roughly 6% below the asking price. Your reasons for offering 270K are to do with the decor, mainly. (I haven't seen a house yet where I wouldn't redecorate, rip out the kitchen and bathroom etc - but my plans are irrelevant in negotiations, to some extent.)

Where I've made a best and final offer, I've backed it up with estimates of costs involved in making the property safe, water-tight and sound. The decor and tiredness of the fixed features don't even come into it because that's to be expected with every lived-in property.

Personally, and if I had been really really in love with the house, then I would have offered around £282K subject to survey, to start off with, and been prepared to go to 286K to take the property off the market. After the valuation and survey, I would drive a harder bargain downwards towards 270K.

But that's just me. Good luck! :beer:

kinger101

Freeraine wrote: »

I suspect that the other would-be buyers who have gone beyond the asking price, will have put in offers 'subject to survey':

This is a given anyway, and nobody needs to state this. Both parties are free to walk away until exchange of contracts.

alchemist.1

Had a similar experience. The house went for 15k over the asking price when we had offered above asking price like quite a few others. Previous sale prices weren't close to the final accepted offer.
35 viewings in a week is easily do-able in block viewings/open house.

i know that there are 13 viewings booked in for one day for one of the houses we are looking at.

Brucealmighty

Thanks very much Jhoney and freeraine for taking the time to reply. I take your point freeraine that the decor not being to our taste is not really the vendors problem!

We made our offer this evening via email at £275500. Fingers crossed, but if we don't get it at least we'll have learned a bit more about the local market. Anyway, I'll update when we hear back from the EA.