Advice on guide price and final offer.

Raffi2020

I appreciate this is ultimately one of those "how long is a piece of string" questions but, as a potential first time buyer, would be grateful for any advice or input from those more experienced in the selling and buying of properties. 

In your experience, do house prices vary wildly from the guide price? Me and my girlfriend have a mortgage in principle and found a place we like. We put an offer in but we know it had ten or more views in the last couple of days, and were told by the agent there's been several offers, and we basically have to give our final offer and leave it up to the vendor to decide, and that they understandably can't really give us any more info.

We do really like this place, and would consider offering the top end guide price or even above it. We know obviously we have to value the house sensibly and can't or shouldn't be offering crazy amounts over the guide price for all the obvious reasons - won't get a mortgage if it's valued unrealistically, it would be a bad investment if overvalued even if we could get a mortgage etc.

We have a price a bit above the guide price we'd be willing to go to, that we think is sensible and reflects a fair valuation, but thought I'd see if anybody had any advice? Is it common for properties to soar above guide prices or is the top end of the guide price really likely to be a fair reflection of the top end value? Thanks for any thoughts or advice!

Hannimal

We have a price a bit above the guide price we'd be willing to go to, that we think is sensible and reflects a fair valuation

Then offer that if this is the home you want.
When I was looking, I put offers on 4 properties. One went well above asking, one went below asking (I offered over asking but there was a cash buyer), I pulled one offer and that one I suspect ended going for below asking as they reduced the price and the one I am buying went for asking. Some houses sell for more than asking, some for less. No one can give you an answer more specific than that. 

amandacat

It depends on the area and type of property and how currently sought after either of those is. To put it in context, the last time I was looking to move house was 2015, one house I offered the asking price and it was declined, another was offers over 160k, I offered 162k and it was declined, neither EA gave any indication of what the seller would accept,  another was on for 190k, I offered 185k, EA said they would accept 188k, another was offers over 170k and they accepted 170k. (I didn’t randomly go around offering on houses- my sale fell through 3 times so I kept losing the property I was buying and never ended up moving but the whole business of making offers on houses was stressful) 
I was looking at what sold in my area in 2019 and in contrast to 2015, houses were selling for well below asking price eg. 290k but was on the market for 335k and so on. 
The seller also plays a big part eg how motivated they are to sell and what idea they have of what their house is worth. I’ve just had a few EAs in and they have suggested I market at 190k, to be able to afford my move I need about 180k so if someone offered that I’d accept it where as another seller might not want to go below 188 or 185. So it’s a really difficult thing to judge because of the way different EAs and sellers can be and also because of the different market factors in different regions and for different types of property.  

Raffi2020

Thanks so much for your input both! I appreciate there’s no definite answer - it’s that old cliche that something is worth what people will pay for it, but it’s been great to just hear the experiences of others and factor that in to my own research. 

I think I’ve got a clearer idea on value, especially after researching other houses in the area and how the market has been doing. I’m looking around South East Wales so it’s an interesting situation at the moment - becoming more popular and pricier after the tolls across the Severn were removed, but it’s still a low price marketplace on the whole, and it obviously doesn’t offer the same sort of links, amenities or benefits as more expensive areas around Somerset/Bristol and Cardiff.

Just weighing it all up really! But it’s nice to have some first hand accounts of other people’s experience - really appreciate the different perspectives.

NameUnavailable

If the vendor hasn't accepted one of those other offers yet it would suggest to me that none are at the top end of the guide price. However knowing they have a 'final' chance serious buyers will no doubt up their offers. Only you can decide what you're willing to go to but choose a price that you think you're happy to pay and which you're also happy to walk away at if you don't win the bidding war - you don't want to be kicking yourself later for not going that £2K extra you were thinking about.

peterhjohnson

Also remember it's not just about price. When I sold, I had a guide price and out of 4 best and final offers chose the 2nd highest. That was because #2 was more procedable than #1.  It turned out to be a great decision because #2 was absolutely no hassle at all.  I would be tempted to do more than offer £XXXX - say who your solicitors are, that you have an AIP with YYY BS, how your sale is going, how flexible you can be about completion, etc. If the EA sees you as a very serious and organised buyer, they will work hard to persuade their client to accept your offer even if it's not quite tip-top

Raffi2020

Thanks so much everyone, and thanks for that insight Peter. You make a good point, I think the vendor is hoping for a relatively speedy sale and we do have an AIP and no chain of our own (first time buyers), so hopefully that goes in our favour.

I’ll be sure to mention all of that when we put our final offer in, as that will hopefully increase the attractiveness of our offer.

Also Peter, hope you don’t mind me asking but, out of interest, did your property sell for the top end of guide price or go for more/less than that? 

youth_leader

When you have your mortgage survey, will they value the house? 

Raffi2020

I believe so. And that’s obviously another reason why we want to get the price right - no point offering over the odds if it’s wildly different to the mortgage survey. 

youth_leader

I hope it goes smoothly for you, good you will have that reassurance, give or take a few thousand.  Unfortunately my buyer's mortgage lender valued my house at £0 because they wanted a damp/timber report, which proved to be a complete waste of my £300 (EA persuaded me to pay for it as a gesture of 'good will').  Good luck.

Raffi2020

Ah sorry to hear about that! Seems like house buying/selling is one almighty lottery in many ways, so you can only prepare so much can’t you! 

Thanks for wishing us luck though, we need it and it’s been great getting some perspective! And I hope all goes well with you too!