How often do houses sell for above the asking price?

kdotdotdotdot

Hello MSE forumers

A question about how often you think houses sell for above their asking price. The reason I'm asking is that I've put in an offer on a property I've seen which was £2,500 under the asking price of £250,000. The estate agent came back almost immediately to let me know that he has another offer on the table "well over" the asking price.

If that's true, I'm wondering why on earth the vendors haven't already agreed the sale and taken the property off the market. It's been empty (it's a deceased estate) for about six months already.

Any thoughts?

My offer was based on the fact the place isn't in good condition and at the very least it needs full replacement of electrical wiring, along with all the works that go with it. It's a 1930s bungalow.

Thanks

AdrianC

<shrug> It's possible.

If it is, then you aren't (I presume) willing to engage in an attempt to outbid this other person. So it's kinda irrelevant. If that other bid doesn't come to fruition (or if it never existed), then they'll come back to you.

You really don't need to justify your bid. It's what you want to pay for the place, no more, no less.

davidmcn

It will depend on the local market, type of property, and where they've pitched the asking price in relation to its objective open market value.

In your case, are you sure the asking price doesn't already reflect its condition?

RelievedSheff

In some areas it is quite common for properties to sell for over the asking price.

In Sheffield for example the asking price is more often than not the starting point for negotiations with properties often selling for well over the asking price.

Depends how many people want that property I guess.

spadoosh

Properties do sell over the asking price, realistically now there wont be many that do.

Id imagine anyone making an offer over asking would want the property removing from the market whilst the particulars are sorted, so id be reluctant to believe there is another offer there that is over asking whilst the property is still being marketed. Saying that whilst phantom bidders can happen it doesnt look like theyre asking you for more money which suggests that another sale is going ahead. If they had an offer on the table and wanted you to negotiate further theyd be dropping hints that they want you to bid again.

I suspect the justification for the offer you made is moot. Why did you pick this house over other houses that do not require the works? Most people pick a dooer upper because theyre cheaper, some arguments for putting your own stamp but redecorating isnt particularly difficult or expensive so prime motivator is typically cost. So is the house cheaper than simlar houses to a higher standard, if so, the deductions youve made have probably already been accounted for.

Obviously people want the most for the least but i can imagine a fair few people have lost out on properties because what is essentially tiny difference in pricing. The offer you put in was 1% lower than asking price. Ok its £2500 but its 1%. You just never ask for items to be reduced by 1%. Over 25 years that 1% is £100 per year. Or 27p extra per day.

Did the estate agents say anything about it when you questioned why it was still on the market?

kdotdotdotdot

Diocletian_II wrote: »

Did the estate agent put it in writing about 'the other offer'? When they lie (and break the law), they always avoid a paper trail.

Yes, he wrote it in the email.

I've offered the asking price now, but can't go higher as that's all I've got in the bank.

I guess it's wait and see time.

kdotdotdotdot

spadoosh wrote: »

Saying that whilst phantom bidders can happen it doesnt look like theyre asking you for more money which suggests that another sale is going ahead. If they had an offer on the table and wanted you to negotiate further theyd be dropping hints that they want you to bid again.

Oh, the EA did ask if I wanted to increase my offer and he could then pass it on to the vendors.

spadoosh wrote: »

Did the estate agents say anything about it when you questioned why it was still on the market?

EA has just replied and said they're waiting for proof of funds from the other person.

hazyjo

The other party may not be proceedable. Always ask if they are. The vendor may choose to wait for them if there's a lot more cash on the table, but they could be wasting their time if their property takes forever to sell or doesn't sell at all.

spadoosh

kdotdotdotdot wrote: »

Oh, the EA did ask if I wanted to increase my offer and he could then pass it on to the vendors.

EA has just replied and said they're waiting for proof of funds from the other person.

Sounding more like a phantom bidder.

eddddy

kdotdotdotdot wrote: »

Oh, the EA did ask if I wanted to increase my offer and he could then pass it on to the vendors.

FWIW, the EA might not want to tell you how much the other offer is, because of this rule:

9g You must be fair and not misleading when disclosing the amount of any offers made to other buyers. Before disclosing the amount of an offer, you must advise the seller of such intention and get the seller’s agreement; and you must warn all buyers who make offers that it is your practice to do so. If you do disclose any offer to one buyer, then all offers must be immediately disclosed to all buyers with a current interest in negotiations for the property

Link: https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

BUT... I sometimes find that if I ask:

"How much do you think I would need to offer in order to have my offer accepted?"

... they essentially indicate what the current best offer is (without breaking the rule mentioned above).

So maybe that's worth a try, if you still want to offer. But it doesn't always work.

System

Sounds like this 'other offer' is no more than the EA's wishful thinking. EAs know all the games in the book to get you bidding against yourself. He has technically got another offer, so he can put that in email to you without breaking the law, even though the other offer is really pie in the sky from someone unable to buy.