Slightly confused re Best & Final Offer & deposit

BrummieL

Last week I made an offer of £147500 on a house with a £150k price tag having been told by the EA that if there were multiple offers it would go to Best and Finals. But it didn't because someone obviously went in with a sufficiently over the top offer they thought no-one would match.
So this week I tried different tactic and made an offer of £150k on house with asking price of £145k - but there have been numerous offers and the EA phoned me about 5.30 to say it was going to B&F and I have until noon tomorrow to get my bid in with details of my financial circumstances etc. I have sold (STC) my property for £220k and will be buying the new property with my equity and a £20-25k mortgage. So I can provide evidence of that without any problem.
But the EA also said something about evidence of deposit - did she just mean how I'm paying the part that the mortgage doesn't cover ie with my equity; how I am going to pay a deposit if/when I exchange contracts or am I being told I need to consider paying a deposit now as I make my B&F offer?
I don't have much spare cash put aside to use for a deposit - it's going on legal fees, survey etc - and was intending to borrow some money from a relative very short term to pay a deposit on exchange. But would it be normal practice to pay something at this stage?
Still trying to decide how high to go in a final offer - prices in the area have been rising since New Year and it's a sellers' market. The vendor only bought it in Dec 2015 and paid £142k and has done nothing to it (apart from hide a condemned gas fire behind a large mirror!) but is selling due to ill health and a need to release equity. Suspect it could go for upwards of £160k and am a little surprised at its valuation.

Suspect sleepless night in store .........

juniordoc

160k would be an almost 13% rise in just over a year, no chance it will go for that!
My bet is that IF there is another bidder, they have offered very close to yours and they are seeing how much more they can squeeze out of either of you and who is the most desperate.
I would stay close to your original offer unless you are happy to overpay.

mysterymurdoch

I'd stay close to the original offer, though i have seen MANY houses going for way over in the past couple of years, seemingly ramping up even more this year. It depends on the area.

A copy of your last mortgage statement would suffice for proof of deposit.

alchemist.1

mysterymurdoch wrote: »

I'd stay close to the original offer, though i have seen MANY houses going for way over in the past couple of years, seemingly ramping up even more this year. It depends on the area.

A copy of your last mortgage statement would suffice for proof of deposit.

Have to agree. People are reluctant to sell at this point in places that are popular and shortage of properties can lead to this type of increase within a year.

alex_163163

If you are selling and buying consecutively, then why do you need to borrow money for exchange on the purchase?
Won't you exchange on the place your selling and on the place you are buying on the same day i.e. You are in a chain, so the deposit that your buyers pay to your solicitor at exchange will move up the chain to be your deposit on your purchase. Usually it will be 10% deposit on exchange but your solicitor should negotiate on your behalf to reduce this if necessary.

saajan_12

BrummieL wrote: »

I have sold (STC) my property for £220k and will be buying the new property with my equity and a £20-25k mortgage. ..
I don't have much spare cash put aside to use for a deposit - it's going on legal fees, survey etc - and was intending to borrow some money from a relative very short term to pay a deposit on exchange.

If you're buying and selling in a chain (so on the same day) the deposit usually moves up the chain. So your buyers pay you a 10% deposit which you pass on to your seller, with a top up as necessary. In your case, as you are selling a higher value house, you should get £22k to pay a £16k deposit so no need to top up (unless your buyers negotiate a lower deposit). All this is handled through the solicitors they hold on to the deposit until completion. You shouldn't need to borrow any money.

BrummieL

Thanks for responses - particularly re deposit. I couldn't remember having to find a large sum when I moved 5 years ago but as that was basically a house swap it may have been a little different anyway.

Although I take the point about the %age increase in a year this appears to be the case in the area that I'm looking at. I'm competing with both FTBs and BTLs - and not sure I'm winning at the moment.

Valuation survey has been done on my flat this morning and not convinced he's going to value it at the selling price despite the fact that I've had 6 offers at the price. It's a downstairs 2 bed flat in a large Victorian semi (just one other flat above) with its own garden and a cellar (currently used as a bedroom) - and the freehold is held jointly in a management company by the leaseholders of the two flats. Most buyers (as I did) are comparing it to small houses in the area rather than to other flats - hoping the valuer will too.