Understanding offers in excess as FTBs

buggy_boy

Crashy_Time wrote: »

And in this market who in their right mind would be doing that?


https://www.theguardian.com/money/2018/feb/07/uk-house-prices-fall-again-as-household-income-squeezed

Yet another hpc useless link bought to you by Crashy, how is this helpful or relevant...

To the OP, properties that are fixer uppers are often hard to value, especially those in high demand areas. Often the estate agents suggest a lower price and have offers over in the hope that it will get several interested parties and the bidding war will find the properties value...

My only suggesting is if you a trying to get these sorts of properties, phone the estate agents on a regular basis (once a week min).. They will often if pushed tell you about properties that they are going to value, if you can get in there early enough and get a viewing before any advertising is done and put in an offer around £5k above the asking price with the proviso no more viewings and any advertising is SSTC. This can avoid the bidding war, estate agents like it as they dont have to do much. The down side is if nobody else liked it you might over pay.. Its down to your skill to value a property, know how much it will cost to do the work (Not as easy as it sounds) and luck.

MissMarble

ReadingTim wrote: »

I suggest no more than 3 offers:

1. opening offer - high enough to be taken seriously, low enough to demonstrate you're not a pushover.
   
2. follow up - this is the serious one - you need to be within 10% (or so) of your maximum offer. Ideally, rounded up to the nearest thousand or ten thousand, as psychologically, people like nice round numbers - a hundred thousand sounds better than ninety nine thousand nine hundred to the ears of the vendor.
   
3. final/maximum offer - this is the most you're wiling or able to pay. Ideally a random (ie nor round) number, implying you've scrimped, saved, and checked down the back of every sofa to find every single penny you have.

Some say if your first offer does't embarrass you, it's too high - personally I think you risk coming across as a timewasting dreamer that way. You could always split your serious offers into two, if only to gauge whether the vendor has realistic expectations as to price - regardless of what the market thinks it's worth, if you can't agree a price with the seller, you don't have a sale.

Finally, your final offer is just that - final. You can't come back with more afterwards. But most vendors expect some element of negotiation, even if it's more of an elaborate charade or courtship dance than hard-bitten haggling, so starting with your final offer will only confuse, as people expect another, regardless of what you say.

Good luck - you're unlikely to get it right first time, so maybe "practise" on some places you're not that keen on so you get your strategy right for when you see the perfect one.

Hi ReadingTim,

Thank you for your detailed and helpful reply - I think we will certainly take your advice. We viewed a house this evening which went on the market on Monday, it already has 5 offers on the table and best and final tomorrow. The house was lovely and is on for offers over £200,000 but apparently there’s lots of first time buyers interested and with it being best and final we are feeling quite clueless. Obviously we don’t want to in too high, but it just seems so broad! As we only got a chance to view it this evening we couldn’t get much of a look around the area (even though its generally meant to be a popular place) as it was dark and raining but think we may make an offer as we liked the house a lot and feel we may gain some experience in this type of scenario even if we loose out! I just wish we had upped our offer on the last place mainly due to the location of it but think nerves got the better of me.

Also do you know if an offer is ever accepted and after only viewed once, is it frowned upon to pull out at that early stage if something is spotted in a second viewing? Thanks again for your help.

Asl77c

Cakeguts wrote: »

If you offer more than the value that your mortgage company puts on it you will be expected to make up the difference out of you savings.

Crashy_Time wrote: »

And in this market who in their right mind would be doing that?


https://www.theguardian.com/money/2018/feb/07/uk-house-prices-fall-again-as-household-income-squeezed

You won't know you are offering over what the mortgage company values the property until you have an offer accepted and then the mortgage company carries out their survey valuation so noone ' in their right mind ' would do it. You never know how a mortgage company will value a home. you could pay under asking price for a property and a mortgage company can value it even lower.

MissMarble

Mr.Generous wrote: »

Couple of tips,

Firstly they all need work. When you look round you will not spot everything, even a lovely house will have some things you will change. Don't be fooled into thinking (or being told) any property is absolutely prepared for just moving furniture in, they never are.

Personally I take no notice of "Offers over" and just look at the price and what I think its worth. Look what has sold locally - not at asking prices.

I offer on a property and depending on the value I'll go another £1000 if its rejected, unless £500 would settle it I won't go any higher after that, I will tell the agent its my best and final offer and I stick to it.

Twice now agents have come back to us (We buy and renovate quite a few) after rejecting offers to say the vendor has reconsidered and accepted. We could easily have gone higher, remember even £1000 buys you a few rooms carpeted or decorated.

Its your money, you work hard for it - spend it carefully and wisely. If you really want a place and your offer is rejected tell the EA your lender won't go any higher, wait a couple of days then offer £1000 more and say your parents have offered to help out but that is your limit.

The seller will be told your tale by the EA who only gets paid when it's sold and doesn't want to loose a buyer. Bidding wars I would steer clear of. Just pay what you think its worth, not what someone else is prepared to pay. The mystery buyer who outbids you might have been given £50k by their Aunt or won the lottery, or might not exist, who knows.

Thank you MrGenerous (great username by the way!) for your super helpful advice. I do try and keep an eye on the house prices in areas we like, but I always get so surprised by how much they end up selling for - although I’m starting to become a bit more immune to the reality. Now that we had a few days to recover from our first offer experience, I wish we had just increased it that little bit further as I think that may have worked to our advantage - but who knows, maybe not.

I think it gets so confusing especially after viewing a house today in quite a popular area with FTBers, to hear that even though it went on the market on Monday, it already has (at least) five offers on the table. It’s on at £200,000 and best and final are to be submitted tomorrow - we really liked the house and had everything on paper but just a bit concerned about the area as we couldn’t see it in the daylight and obviously don’t want to overpay but need to be realistic. The house was in a good condition but trying to think of a suitable figure after a ten minute viewing is quite tricky.

As for the work, a few weeks ago we looked at one house which needed a lot of work doing so now seeing some obvious signs of improvement doesnt faze me as much as they may have done previously, but we completely understand a lot could be lurking elsewhere! Good luck with any new renovations!

zorber

In my area lower price houses seems to be going in a few days whilst slightly higher priced houses are stalled.

I just bought a house which stated for offers over, i completely ignored that and went in £20k under, i expected it not to be accepted and added £10k once that happened then i paused and started rejecting the estate agents requested that the vendor needed more. I justified my position to the estate agent by pointing out other nearby houses which may have been bigger for the same money and also i could by a new build property on the same estate for the less money, same size house and get to pick all the colour schemes etc.
In the end i agreed to meet them in the middle by adding £5k to my offer and this was £5k under their offers in excess of.
The houses garden was what i was after as i wanted side gate access to be able to site a caravan down the side of the house or in the back garden for storage.
Its worth noting that when you look around the house be observant, the owner was saying they were in no rush to sell, however the facts appeared different, they had already dropped their asking price by £10k and the house had only been on the market a few weeks, then the owner has left out a congratulations on your new job card. Whoops. it turns out they wanted a quick move.

So depending on your local market and how quick house are moving depends on what you should do. I cant advise there, but offers over does not always mean offers only. There is no harm in offering lower.

Lauralou79

As someone who bought in Greater Manchester last year as a FTB I don!!!8217;t think you are doing anything wrong or there is a right or wrong way. You are right the market is fast moving for houses in a certain bracket.
The first house we offered on needed a bit of work it went to food nail bids a week after being on sale. I didn!!!8217;t over offer as you have to take in the work/ costs but in the end we lost it by a thousand.
Anyway a house that needed less work finally came up and had features etc basically I loved it. They put it up Thursday we viewed sat ( they had viewings all weekend) luckily the vendor liked our position n after price negotiation we got our lovely house.
Anyway I was wondering reputed to go higher as I loved the house so much.

Lauralou79

Accidentally posted that, I think when you find a house you really love you will be prepared to offer more than you think (within budget) Slightly different if you aren!!!8217;t planning on being there long maybe?. You can only offer what you think you want to pay.

The_Palmist

I want to share an experience from 10 years ago.

House was on for overs in excess of £120K, we viewed liked and offered £122K then increased to £125 and were willing to go to £130K.

Express agency told us that Vendors are expecting around £150K, which made no sense to me.

We moved on and bought a similar house in same street, few months later found out that Express sold that house for £110K......to date I wonder why they didn't sell to us when we offered £15K more and were FTBs in a strong position to proceed.

ashe

I would absolutely ignore the terms used by EAs in listings

Offers Over
Offers In Region Of
Offers in Excess of
Guide Price

etc

Offer what you think the house is worth, its all marketing.

PokerPlayer111

Everytime i ring up i ask if the property is negotiable, if its not then i dont bother with it, unless it was super amazing perfect why bother.