Up my offer on house that I think is worth below asking price?

Posiex

Hi, the second house I viewed I liked enough to put an offer in over a week ago but as I think it's optimistically priced I offered based on recently sold local house prices (92% of price). I have about 10 houses since, each confirming I like the second house most. My living situation though very cheap is impacting my health and I am eager to move out yesterday!

The house I have offered on has been listed a month ish and is in an area where not many come onto the market, however when they do they are a lot cheaper typically. Feedback from the estate agent is the offer is too low and they have a lot of interest so will contact me when there is another offer on the table. The estate agent also advised me the vendor was hoping for 5k more than advertised guide price! I feel like my options are:

A) move out and rent until a similar property comes available for a better price.

offer 5k more than my original offer (97% guide price) as this is what I would spend on rent and bills during a minimum 6 month rental term.

C) Go in slightly above guide price to give myself best chance of getting it with the expectation I may have to reduce my offer and lose out anyway if the mortgage valuation or home buyer survey comes back with a value below my offer.

Any advice?

Thanks

AdrianC

Forget %ages. Compare £s and £s alone. Some places will have optimistic figures given, some will be priced realistically.

Offer what you think you're happy to pay for it. If the vendor thinks it's worth more, then walk away. If your lender doesn't agree with the offer, and your vendor stands firm, that simply means that you're going to be working on a slightly higher LtV than you thought - would that be a showstopper, because you're right up against the top of your affordability? If so, then it's time to walk away.

And - really - only the second place you've viewed? Do you even know yet what you really want, what you're prepared to compromise on, and what you aren't?

Remember - buying a place takes months, and you'll be owning it for years. You aren't going to "move out yesterday". If your offer's accepted tomorrow, you should be in for April...

quotememiserable

AdrianC wrote: »

And - really - only the second place you've viewed? Do you even know yet what you really want, what you're prepared to compromise on, and what you aren't?

No, OP said they viewed another ten after it.

warby68

If you really like it and there isn't much else you do like or in that area then upping your offer once makes sense. £5k is a 'serious' in increase on the price level you're at and should mean you are taken seriously. Ignore the agent for the most part though- prices above the listing tend to be when people are competing and you're not there yet. A month isn't long but it is long enough if it really is a very 'in demand' house.

There are several values for a house but the main ones are the market value (for arguments sake the one the valuer will come to) and the specific value to you - the value to you can include a bit of a premium for scarcity, being just what you're looking for and need to move urgently. I'd also suggest avoiding an interim move and additional rental costs/upheaval has some intrinsic value too. These things would take you closer to the top end of what you're willing to pay.

That would be my thought process. One more offer and then sit tight.

Bossypants

I was in a similar situation about a year ago. Desperate to move but there was only one thing I really liked on the market and I thought it was significantly overpriced. I made what I thought was a reasonable offer, got rejected with no counter. Went away and thought about it, and decided that I was willing to overpay for the sake of being able to move asap into a house which was both objectively 'good' (location, build quality, plot) and which I really liked the feel of. I estimate that in the end I overpaid by about £10k, but I am now very comfortable in my home and have zero regrets. Whether that would be the case for you with this house, only you can say.

akira181

I spent around 6 months looking for my first flat and I lost count of how many places me and other half visited before we made an offer on one. The place we liked was right on the upper end of what we could comfortably afford and I wasn't too keen on committing to that. So I tried an offer 10k below asking (home report had a valuation equal to asking price). The EA immediately said that my offer was too low and that he’s had offers 5-7k over asking price refused, so I should reconsider my offer. Reluctantly, he forwarded my offer, it was refused and the EA told me I’d need to go at least 10% over on asking price and I should decide soon as there’s some interest in the property.

However, I met the vendor and got his number during a previous visit so I spoke directly to him after my offer was rejected. The vendor basically said that my offer was the first one he’s had since he redecorated and he would be happy meeting me in the middle to recoup decorating costs, which I did. In short, I recognise I got lucky with my flat and realised a lot of EAs are working to maximise sale price (and in turn their commission) rather than what’s best for the buyer. At the end of the day, they are salesmen with sales tactics so take what they say with a pinch of salt.

Make an offer, if it gets rejected, revise your offer. If you can’t afford to go any higher, then tell the EA that’s your max and it stays on the table until you find somewhere else. Other side of the coin, you don’t want to lose out on the ideal property just because you’re trying to save some cash when you can afford it.

The important thing is to know your budget and stick to it. If you stretch yourself on your mortgage, you’ll end up hating the place if you haven’t had a holiday for 10 years due to the stress of making repayments.

Posiex

Hi, thanks for the advice everyone and YES! I would wager I know what I want more than 99% of others in my position, since I have dreamt of my own home since I was a child and have hated renting various types of houses over the last 14 years. it has pretty much been my focus all this time to get myself in a position to buy and the house i offered on hits 10/12 of my (according to budget) perfect home criteria. It is guide priced at 15k over what I wanted to spend, however is still under what I could realistically afford with penalty/delay to some other hopes and dreams.

I have one more viewing arranged for a property tomorrow which is the same house plus or minus some features, but it is only 5k over what I wanted to spend. I am praying that tomorrow I get the feels for the house in the same way so I can offer on that for closer to my budget and be more likely to be accepted. Wish me luck!