The psychology of the "offers over" situation

eddddy

lookstraightahead said:

They lost a very serious potential buyer. For those who have sold/bought in an "offers over" situation, what has been your experience?

One EA admitted to me that they use the 'offers over' approach as a way of tricking sellers (I suspect other EAs do as well)...

For example, in this kind of situation...

• EA "I think you need to reduce the asking price from £260k to £240k"
• Seller "No - I'm not prepared go below £250k"
• EA "OK - let's say 'offers over £240k' and then you might get offers of £250k"

When the EA knows that people generally ignore the 'offers over' bit, and will offer under £240k - and then the EA puts pressure on the seller to accept an offer under £240k.

But there will be other reasons as well.

AdrianC

eddddy said:

lookstraightahead said:

They lost a very serious potential buyer. For those who have sold/bought in an "offers over" situation, what has been your experience?

One EA admitted to me that they use the 'offers over' approach as a way of tricking sellers (I suspect other EAs do as well)...

For example, in this kind of situation...

• EA "I think you need to reduce the asking price from £260k to £240k"
• Seller "No - I'm not prepared go below £250k"
• EA "OK - let's say 'offers over £240k' and then you might get offers of £250k"

When the EA knows that people generally ignore the 'offers over' bit, and will offer under £240k - and then the EA puts pressure on the seller to accept an offer under £240k.

But there will be other reasons as well.

Let me turn that situation around slightly.

The EA knows damn well nobody is going to be interested above £240k.
The seller is deluded about the value, and refuses to understand why it's had no interest at £260k...

eddddy

AdrianC said:

eddddy said:

lookstraightahead said:

They lost a very serious potential buyer. For those who have sold/bought in an "offers over" situation, what has been your experience?

One EA admitted to me that they use the 'offers over' approach as a way of tricking sellers (I suspect other EAs do as well)...

For example, in this kind of situation...

• EA "I think you need to reduce the asking price from £260k to £240k"
• Seller "No - I'm not prepared go below £250k"
• EA "OK - let's say 'offers over £240k' and then you might get offers of £250k"

When the EA knows that people generally ignore the 'offers over' bit, and will offer under £240k - and then the EA puts pressure on the seller to accept an offer under £240k.

But there will be other reasons as well.

Let me turn that situation around slightly.

The EA knows damn well nobody is going to be interested above £240k.
The seller is deluded about the value, and refuses to understand why it's had no interest at £260k...

Yep - that's exactly the point I was making.

AnotherJoe

lookstraightahead said:

I've been out of the house buying market for a while. Now I'm looking to buy again I'm wondering what the intention is behind "offers over". I asked to view a property yesterday and the agent wanted proof that I could offer £10,000 OVER the "offers over" price, before she would let me view. I could, but why would I show my hand in advance. They lost a very serious potential buyer. For those who have sold/bought in an "offers over" situation, what has been your experience?

I'd say you are starting at a psychological disadvantage if you think that them knowing how much you can afford alters your negotiating position. Eg "show my hand".
why would you pay every penny you had? I am buying a house that's considerably cheaper than my maximum affordable a amount which is in turn considerably less than my budget. That didn't mean I had to pay maximum asking price of the house I am. To me it's worth £x and that's what I'll pay at most. 

Regards them wanting to know you could prove you could pay, are you sure you haven't got hold of the wrong end of the stick? These days EAs do want proof you can afford the price so was it actually them wanting proof you can afford it and being over zealous? Alternatively it may be the vendors actual bottom price is indeed £10k over the AP (in which case why not, as another poster said, just make that the AP with no offers under acceptable?)
If you really want the house, let them know your offer and state you want to know if it's acceptable before you start jumping through the paperwork hoops.

prowla

"Offers over", "What's your best price?", etc. are just bargaining gambits.

The antiques buying shows on TV are great for a laugh:

• Item marked £50.
• What's your "best price" on this?
• I can do it for £35.
• Can you do £25?
• I can do £30.
• £28?
• OK, deal.

The bottom line is offer what you are prepared to pay.

Eilidh1970

I'm in Scotland and I don't mind the 'offers over' system, because I think it gives a sensible idea of the minimum price the sellers are looking for (I'd find it far more confusing and annoying to be having to deal with the 'cheeky offers' thing, but I suppose it's just what you're used to). My experience of 'offers over' is that there can be quite large fluctuations in what's expected depending on things like area and the prevailing market - for example, when I bought my first flat, if I was looking at anything in the West End of Glasgow I'd have needed to go 25 per cent over to buy a property, whereas in the area I bought in, the sellers were happy with an extra £1k. It's worth researching recent sales prices in the area.

csgohan4

I skipped properties that had Offers over/ OIEO, didn't want to waste my or the vendor's/EA time negotiating over an overpriced property.

pbhb

I’ve had an offer accepted £10k under the ‘offers in excess of’ asking price, they didn’t even try and negotiate. They accepted straight away

davidmcn

Eilidh1970 said:

when I bought my first flat, if I was looking at anything in the West End of Glasgow I'd have needed to go 25 per cent over to buy a property, whereas in the area I bought in, the sellers were happy with an extra £1k. It's worth researching recent sales prices in the area.

Was this before Home Reports came in? Asking prices are a bit more sensible if all parties start off knowing what an objective valuation of the property is.

TheProfessional

We offered under on an offers over and got accepted. We offered what our maximum was and what we thought it was worth.

Our own house the agent said to put guide price. Don't really know the ins and outs of the psychology behind it but there must be some studies out there