First time buyer bidding war advice

o_johnston

Hello, hopefully someone can give some advice. To summarise as briefly as possible, my partner and I are renting, rent is going up from January 2021. We have enough for a deposit, found a home we love just around the corner for sale. 

Asking price was above 200k. We offered 200 with a mortgage in principal. EA then said offer of 201 came in, we offered 202, now they are saying other first time buyers have gone straight to 205k.

How to know if bids are real?
I'm also worried about a bidding war where the property is valued lower than we offer, so what happens then?
I've asked the EA at what point will the vendors accept, since they haven't specified an amount and also they already have a new house ready to move into.
We weren't the first couple to view the house. There were 2 days of viewing before ours and no offers were made.

Really appreciate any advice you can give. Thanks.

frogglet

I wouldn't have it valued till you have an agreement with the seller.

moneysavinghero

You are already in a bidding war. If this worries you, then let the EA know you have no further interest in the property. Otherwise offer what you are prepared to pay. That IS the value of the property.

Yes your mortgage provider may have a different opinion on the value, and if your deposit is not enough to make up the difference then you will not be able to buy the house.

o_johnston

frogglet said:

I wouldn't have it valued till you have an agreement with the seller.

It hasn't been valued yet, but my worry is we go to 210,000 and Nationwide who our mortgage would be with, say they value it at 200,000. Then what? 

frogglet

As said above, you make up the difference or pull out. 

frogglet

Have you applied for a mortgage?

Eilidh1970

How much is your mortgage in principle for, and is this the full amount the bank is willing to lend you? 

pinkteapot

o_johnston said:

How to know if bids are real?

You don't. Only you can decide how much you want the house and how high you're willing to go. 

For what it's worth, we lost a house by not believing in another bidder last year. We were dealing direct with the vendor as it was Yopa, not a real EA. House had been on the market for a year and the vendor said they had a higher offer same time as ours. I just didn't believe them. I was wrong. So it can happen. 

o_johnston

Mortgage in principle is for 205,000
We have £60,000 allocated for a deposit but could go to 65,000.
Both help to buy ISAs will have the £3000 bonus but I'm not sure when the Government pays that. I know it's once everything is agreed and done.
Nationwide said they could go up to 280,000 for a mortgage in principle based on the information I gave.

I just don't want a scenario of nationwide say it's worth 200, so they'll only loan us 140,000 so then we have to pay beyond what our deposit will allow for.

moneysavinghero

From the figures you provided, you wont have a problem unless the valuation comes in spectacularly low.

PawelK

Hi.
I was in exact same situation over three years ago. You obviously have no way to check of what EA tells you is true but have to believe they are trustworthy, act ethically but will always work in best interest of the seller. My bidding was actually more tense and nerve wrecking. If I was to lose that property I wouldn't be able to afford similar for a while as my circumstances were changing but I got it at the end. If it's really your dream home (mine wasn't dream home but the only I could afford without much compromise on the property itself) talk to your EA like I did. When I was told that the seller made up her mind and accepted higher offer of a couple I was bidding against, I was gutted and resigned but I called him for my final fight and told him I am single, been looking for a property for five years and could never afford one. What's more important, after he refused going back to the seller with my new offer £1k higher, I said to him of he can try as at the end of the day it's in his and seller's best interest to get the highest possible price for the property. He reluctantly agreed and when he called me next morning I answered resigned and angry thinking he is calling for a feedback some sort bit he told me the seller slept on it and had a change of heart and accepted me. So, it was lucky that the bidding ended at that point but I will never know if I was that convincing or if there was actually never anyone bidding against me. I believe in the former as I want to believe in something good. GOOD LUCK TO YOU! At the end remember, missing one property may bring you even better one soon after. Everything happens for a reason.