OIEO bidding

PawelK

Hello all reading this. I was wondering whether anyone had experience of putting an offer on a flat in London? I just saw one today which is far better than anything I have seen so far. It says online £260oieo and there is a similar property in exact same block next to it for £280. I was thinking how to go about the ea to see what is the current situation like any offers put already. My absolute budget is £275 and I would be willing to pay that but really would like to pay under 270. Obciously dont want to put too low offer in case if someone else overbid me and it gets accepted. At the same time I just read online that ea often put that wording to inflate the price so people dont start lower but some people managed to actually gnore this and their offer below oieo was accepted. I am very keen on the property although keep my head cool and its not the end of the world if I wont get it.

Any advise what to ask ea about on Monday morning? I want to put a list of some questions as well and perhaps then put an offer slightly below 260 and see what the reaction is like? My advantage is having ai and being able to move quickly. Flat is currently tenanted but ea assured me they have around a month left on the agreement and moving out.
Does the ea have to tell you the truth whether another offer has been put down or mine rejected even if its not the case so they get a better selling price?
Any sound advice would be great.

Cakeguts

EA will tell you anything about tenants just to get a sale. The situation is that the tenancy agreement ending doesn't mean that the tenants have got to leave. If they decide not to the landlord will have to go to court to get possession of the property. This could take up to 6 months so your advantage of being able to move quickly means nothing.

Wait until the property is vacant before you even think of putting in an offer.

eddddy

I would start the conversation with something like "It's a great flat, but £260k is a little bit more than I can afford. Is it worth me putting an offer in at £255k?"

You can always miraculously find a bit more money later, to increase your offer.

If you and the seller can agree on a price, you'll then have to negotiate on how to move forward because of the tenants.

PawelK

Cakeguts, good point, thank you. Of course, I would not sign a contract without ensuring tenants wont be staying longer after their agreement end. Even if it comes to few extra months, the current rent is way above my mortgage repayments so it would not be such a complete disaster.

Eddddy, thanks very much. Thats exactly the kind of wording advice I was hoping to get to know how to approach the ea. Please keep them coming. :T

Cakeguts

It isn't just the case of the tenants staying longer but also you can't actually see what you will be getting for your money until the tenants have left. If you put in an offer now and the tenants leave and cause a lot of damage what do you do then? You will either have to ask to lower your offer and risk losing the flat or you will have to accept it with any damage that isn't covered by the deposit.

Will your mortgage offer expire if the tenants don't go straight away?

PawelK

Even if my aip expire i shouldnt have problems in getting one anyway. I will seek if I can obtain any guarantee of tenants moving out next month before any commitments.

AnotherJoe

PawelK wrote: »

Even if my aip expire i shouldnt have problems in getting one anyway. I will seek if I can obtain any guarantee of tenants moving out next month before any commitments.

The only guarantee worth anything is that they've left before you exchange.

Sausage11

If you like the flat go for it. Ask the estate agents where you need to be in terms of an offer to be competitive. Then ask if they've had offers around that figure. In this part of London, are flats going quickly? Does the one at 280 look a good buy? You should be able to get a good idea of what is a realistic value. Doesn't meant that you'll get it but at least you know if you don't get it you offered a sensible amount for your budget and the market.

I wouldn't worry at all about it being tenanted. Sure, if the tenants don't leave it could get very delayed. But from the sound of it that isn't too much of an issue for you - you're not on a tight deadline. Also, if you put in an offer now and then when the tenants do leave you find out they've trashed it, you just say "As you're aware, the tenants have trashed the property so it's in a much worse state than any of us anticipated. As a result I'm going to have to reduce my offer to x in order to compensate for the work required."

You're in a good position - both in terms of your finances but more importantly that you're not desperate and can take your time. Go for it!

Edit: Just saw Another Joe's post. Yes. For God's sake - don't exchange until the property is vacant. If you exchanged before they left then you really could be putting yourself in a whole lot of bother.

eddddy

Broadly as Sausage11 says:

1. Concentrate on getting your offer accepted

2. Decide how far you want to progress, whilst the tenants are still there.

The problem is that you may end up in a stalemate... for example:

You say -

"I'm not spending any money on searches, mortgage applications etc until the tenants are out. Just in case the tenants refuse to leave and/or trash the place."

The seller says -

"I'm not going to start evicting the tenants until you prove that you are a serious buyer, by spending some money on searches, mortgage applications etc"

The seller might give-in to you, or might decide to look for another buyer who will do what the seller wants.

PawelK

AnotherJoe, while quite obvious-thanks as well for pointing that out. Committing (eg signing) before i see the flat again after its vacant would be a high risk if not a suicide.

Sausage11, thanks for your time to write a very reassuring but also objective message. Much appreciated. I might go and see that other flat for £280 in the block next to as well to have comparison.

AnotherJoe

PawelK wrote: »

AnotherJoe, while quite obvious-thanks as well for pointing that out. Committing (eg signing) before i see the flat again after its vacant would be a high risk if not a suicide.

Sausage11, thanks for your time to write a very reassuring but also objective message. Much appreciated. I might go and see that other flat for £280 in the block next to as well to have comparison.

As eddddy says, there could be a stand off so it might be reasonable to spend a little money on searches and get the mortgage application underway to assure the buyer. But stand firm on no exchange unless vacant.