Offers strategy

rwcwilson

Hi,

We are currently on the hunt for a house in Manchester. We have mainly been looking at Chorlton and Didsbury, but prefer Chorlton. As someone else has posted recently on here, the (nice) houses are going within a week of listing and going to 'best and final' offers. We are FTB, out of contract in our rented house, so we thought we were in an attractive position for the sellers. Anyway we've offered on three houses that have gone to best and final and lost out on each one, in each case we've ended up bidding well over the asking price but still lost out. We ended up bidding to what we felt was a fair price for the road/house but people still feel its worth more, so end up winning. I think what's stopped us going any higher is the risk of the mortgage valuation coming up significantly less, where we would likely not be able to pay the difference.

I guess what I was hoping for is an opinion on strategy going into these offers. Do you just ignore the mortgage valuation and bid as high as you are willing to go? Are we really that attractive as buyers for the sellers??

Many thanks.

JoJo1978

I think you've answered your own question. If you can't risk needing to make up an offer Vs valuation shortfall then stick to your current strategy.

At the moment there will probably be relatively fewer listings Vs buyers which is why more are going to bids. Throughout Feb and March the volume of listings will increase so the competitive pressure may ease, although it won't disappear for FTB suitable properties.

Develop relationships with the estate agents who may be able to tip you off as soon as properties are likely to go on, even before they hit the internet. That will give you a little bit more time to be 'first in.' Depending on their own position not every seller will push for bids and some may accept the first offer made, if it gives them enough to do what they need to. Good luck

rwcwilson

JoJo1978 wrote: »

I think you've answered your own question. If you can't risk needing to make up an offer Vs valuation shortfall then stick to your current strategy.

At the moment there will probably be relatively fewer listings Vs buyers which is why more are going to bids. Throughout Feb and March the volume of listings will increase so the competitive pressure may ease, although it won't disappear for FTB suitable properties.

Develop relationships with the estate agents who may be able to tip you off as soon as properties are likely to go on, even before they hit the internet. That will give you a little bit more time to be 'first in.' Depending on their own position not every seller will push for bids and some may accept the first offer made, if it gives them enough to do what they need to. Good luck

Thanks for your helpful response. We are indeed very much getting the impression that there are more buyers than 'nice' properties, which I guess is to be expected this time of year and due to how popular the area is.

I guess what I was wondering was whether to bid high (still within budget), get our offer accepted and then negotiate down if the mortgage valuation is less. I know this is risky but I have a hunch (could be completely wrong though) that this is what others may be doing. Does the mortgage valuation take in to consideration that there were multiple bids/offers well over the asking price?

I'll try to contact the estate agents but I don't think we'll have too much luck that route, as they'll be aware that properties are selling like hotcakes and we can only view at weekends due to work.

eddddy

rwcwilson wrote: »

Do you just ignore the mortgage valuation and bid as high as you are willing to go?

I'd ask an EA what kind of mortgage valuations come back on properties that sell over asking price.

I'd expect the EAs to be honest on this - they won't want you to bid high on a property, if it means you'll later drop out because of the mortgage valuation.

rwcwilson wrote: »

Are we really that attractive as buyers for the sellers??

It sounds like you're 'proceedable'. Your percentage deposit is another factor.

But most sellers look at the amount offered first. If you and somebody else offers about the same, the seller might then choose based on who is more proceedable and/or who has the higher deposit percentage.

rwcwilson wrote: »

Does the mortgage valuation take in to consideration that there were multiple bids/offers well over the asking price?

No - the mortgage valuer will not know that.

It is based on what the valuer thinks it would sell for, if you fail to pay the mortgage and it gets repossessed.

rwcwilson

Thank eddddy. Is it reasonable to ask the EA that we're negotiating with or one independent from the sale? I'm just wondering if the former will be honest.

Our deposit percentage is 20%.

Thanks for clearing up the last point.

eddddy

rwcwilson wrote: »

Is it reasonable to ask the EA that we're negotiating with or one independent from the sale? I'm just wondering if the former will be honest.

You could just ask a few EAs a general question... "I've noticed that lots of properties in this area are selling at over the asking price. Are the mortgage valuers generally valuing them at the offer price, or nearer to the original asking price?..."

"... because I don't want to waste peoples time making offers over the asking prices, if the valuations all come in lower, and I have to walk away."

If different EAs give different answers, you can make a judgement about which ones you believe.