First Offer Rejected - What to do?

Picara

Hi again! So, I went with £175K as my second offer, and the estate agent called me today to say that me and the other buyer have both offered the same, so the vendor has asked that we both give them our best offers by tomorrow 10am. Argh, this was the answer I wasn't expecting - I thought it'd be a yes or no.

I was prepared to walk away if the offer was rejected, but it hasn't been. I'm not sure whether to increase further - I could stretch to £177.5K, but if the others go for asking price there's not much I can do.

I suppose I'll offer whatever I'm comfortable with and let the chips fall where they may...

AnotherJoe

If its not your dream property, I'd suggest you point out you an easy buyer, no chain, ready to move asap but £175k the most you are prepared to pay. That could still trump say £177k from a more complex bid. It would if it was me though of course 'm not selling it. (I am selling a flat though and I'd definitely take a lower no chain offer over a higher longer chain one.)

Do not say £175k is the max you can afford, because they might think if you have a mortgage problem you may not be able to afford it and go with the other bid. Just say its the max you are willing to pay and stress lack of chain.
If it is your dream property, which it doesn't sound like, then obviously bid your max.

Picara

Thanks AnotherJoe! Location and size wise, it is pretty much my dream property, and I can afford asking price - every other 2 bed flat in the area is going for £190K+ second hand or £230K+ new build, which I can't afford. With renovations, I think I'd be really happy there and value would increase.

I've asked the agent and apparently me and the other buyer are both in a similar situation - no chain (I think they might be buying as an investment) and finances in place, so I don't have much leverage there.

If I make a 3rd offer, I think I'll have to go for asking price or a tiny bit higher. If the others started at £175K, I doubt they'll increase by a couple of grand for their best offer.

novelty-socks

I'd be tempted to give £175k as your final and best offer, reiterate all the things that make you a good buyer, and then let them decide. But then getting sucked into bidding wars isn't my cup of tea, and I live in London, where the market may be very different.

Picara

I'm pretty sure I'd lose it if I stay at £175K. I didn't want to get sucked into a bidding war either, and I offered low at the start as there were no other offers and I was chain free, but now that we're both (allegedly) matching at £175K, I'm reconsidering.

Asking price would definitely be the most I can stretch to, so if I still lose it, I was never going to have it. I rather think that than thinking I lost it because I tried to get a deal.

mistertea

You mentioned a few times that you could go to £177.5K. If you want it that much (and believe that the other bidders really do exist) then go back with that as your best and final offer. You've then done all you can.

novelty-socks

Fair enough. The only other advice I'd give (and I'm inexperienced as anything in this, so, y'know, take it with a pinch of salt is):

1. If it's on the market cheaper than other comparable places, there's probably a reason, so make sure you understand what that reason is and don't end up overpaying because you feel the pressure.
2.If it falls through, there's always another place that comes onto the market. You just have to bide your time sometimes.

Good luck anyway, I hope it works out!

Picara

If they go for full asking price and I do £177.5K, I wouldn't get it though. I'd hate to lose it for £2.5K, which is not a big increase in monthly mortgage payments.

I have no way of knowing if they exist. It is a gamble. Can estate agents lie to that extent? Isn't it illegal to make up stuff like this?

lookstraightahead

I would bow out as I hate bidding wars and it would put me off the property. It sounds like greed to me and I would walk. If they come back to you and accept your generous offer then great, if not, you have loads of choice and it wasn't meant to be. That's how I see it anyway!

Surrey_EA

Picara wrote: »

If they go for full asking price and I do £177.5K, I wouldn't get it though. I'd hate to lose it for £2.5K, which is not a big increase in monthly mortgage payments.

I have no way of knowing if they exist. It is a gamble. Can estate agents lie to that extent? Isn't it illegal to make up stuff like this?

Yes, it is a clear breach of The Estate Agents Act (1979) for an estate agent to invent an offer from another party.

There is no logical reason why they would do so anyway, despite practically everyone assuming an estate agent is lying when there happens to be two people offering on the same property.

The extra commission an estate agent could potentially earn for a £2500 variance in the price, is so insignificant it is not worth worrying about. Yes the estate agent is there to secure the best price possible, but that should not involve lying about the existence of fictitious other interest.