Considering the bank valuation when making a sealed bid

rococomaiden

A property we have made a bid on is requesting that "best and final offers" be made by next Monday.

The issue is -
1) The property was listed as "offers above £360" rather than an exact asking price. The estate agent confirms the property was listed below the valuation in order to sell quickly but won't give us a figure.
2) There are apparently 7 other bidders.

Our mortgage advisor thinks we can get a mortgage for 380k for a property, but if the bank doesn't think it is worth 380k we could not cover the additional 20k in cash unfortunately.

Do we need to offer a lower amount, or is it ok to later reduce the offer if the bank evaluation is low?

Unfortunately no properties have sold on this road in 2 years and it is a park-facing road so the nearby properties are not really comparable.

csgohan4

perhaps it's over priced??? are you sure there are 7 other bidders and not ghost bidders to get you to offer more than what it's worth?

Offer what you think it's worth and take it from there

rococomaiden

I guess you can never be sure... but the property is in a highly competitive market and it really is a gem.

AdrianC

When you say "the valuation", are you talking about a Home Report valuation in Scotland?

Because in England and Wales, the only valuation a lender gives any credence to is the one carried out on their behalf. They won't care about any pre-existing one.

davidmcn

AdrianC wrote: »

When you say "the valuation", are you talking about a Home Report valuation in Scotland?

I hope not, as the agent wouldn't have the option of refusing to let potential buyers see it. That is kinda the point of them. So assuming not Scotland, the only "valuation" is what the EA thinks it's worth, which is neither here nor there.

AnotherJoe

rococomaiden wrote: »

A property we have made a bid on is requesting that "best and final offers" be made by next Monday.

The issue is -
1) The property was listed as "offers above £360" rather than an exact asking price. The estate agent confirms the property was listed below the valuation in order to sell quickly but won't give us a figure.
2) There are apparently 7 other bidders.

Our mortgage advisor thinks we can get a mortgage for 380k for a property, but if the bank doesn't think it is worth 380k we could not cover the additional 20k in cash unfortunately.


What do you think its worth to you (within your limits of affordability). If you are convinced this auction is genuine,and it most likely is, then offer that.


Do we need to offer a lower amount, or is it ok to later reduce the offer if the bank evaluation is low?

Unfortunately no properties have sold on this road in 2 years and it is a park-facing road so the nearby properties are not really comparable.

You can try that but if i was the vendor I'd tell you to take a long walk off a short pier. They will have 6 other bids to pick from.

G_M

Think of a number. If you were to have that offer accepted, would you in years to come feel happy, or would you be constantly asking yourself if you'd over-paid?


Now think of a lower number. If you were to have that offer rejected, would you in years to come feel happy, or would you be constantly asking yourself if you should have offered more?


Now ofer the appropriate amount !


Oh, and if it's rejected you can always try increasing it - "best and final offers" does not always mean best and final offers!

rococomaiden

Sorry for not clarifying; this is in England.

I was told that the bank does a valuation to ensure that the house is worth what you are asking to borrow.

rococomaiden

G_M wrote: »

Oh, and if it's rejected you can always try increasing it - "best and final offers" does not always mean best and final offers!

That is a good point (I would hate to be gazumped myself though!).

AdrianC

rococomaiden wrote: »

I was told that the bank does a valuation to ensure that the house is worth what you are asking to borrow.

Yes, they do.

And, obviously, your lender hasn't done that yet. The EA can take a guess as to what they'll come back with, but no more than that - so they can't possibly say £360k is less than the valuation that hasn't happened yet.

DrSpendLittle

Just been through this myself. First, its important to remember that you may be competing with cash buyers who are not at the mercy of the banks own valuation and thus can push price further.

Do as others say, bid what you are comfortable paying for the property. We did that and lost out because the vendor went for a cash buyer. We could have afforded much more (we have subsequently had an offer accepted on a property that is £135K more expensive than the one we put a sealed bid on) but we decided to offer what we thought the property in question was worth to us, bearing in mind we were somewhat hamstrung with what we felt the bank may value the property at. We don't regret losing the property as we have subsequently found our dream home (fingers crossed!!).

Good luck!