In a bidding war

Barmy_Army_92

I have until noon tomorrow to make a final, best offer on a house. My current offer is 165k. The house is on the market for 170k. The estate agent has just told me that there are two other interested parties. I enquired about these offers, but they wouldn't reveal any details. Instead I was told that this next offer would need to be at or above asking price to be seriously considered. 
I'm a FTB so this is all new to me. This house is in excellent condition, semi, garden, garage, new bathroom/kitchen and well within our budget [which we want as we are both young,my partner is pregnant, I also want the option to maybe take a pay cut for a couple of years to try out a new career] so we would like easier to manage monthly payments in the first fixed term. The only downside to the property is it's small upstairs and it's a two bed, obviously we have already discussed this prior to the first offer and feel that these negatives are offset by the positives. 
All this aside, how do you arrive at a sensible figure to try and get the house, and have no regrets whichever way the decision goes tomorrow?

yllop1101

Compare the market, what have similar houses in the area sold for? Look on Zoopla, Rightmove etc. 
What can you afford? 
What are you happy to pay for it? 
What will you regret not offering if you don't get the house? 
How favourable is your position relative to other buyers, e.g. are you in a favourable position which may offset a lower offer? Often estate agents will give some insight into this.

It's a difficult situation to be in, I've been there many times myself. I know when I lost out, I regretted not offering more if I could have afforded it. When I knew I offered my best/what I was happy to pay, and I didn't get it, I was more accepting when I didn't get it. 

anselld

You cannot rely on what the EA has said.
There may or may not be other offers.
If there are other offers they may or may not be at or above asking.  
They may or may not be above your current offer.
So you need to do your own homework and decide what it is worth to you.  If that means resubmiting your 165k bid then so be it. 
Bear in mind also that if the EA winds up buyers to over bid then it may all come crashing down when the winning buyer tries to get a mortgage valuation at that price.                                        

GDB2222

You are more or less treating this house as though it is the only one around that you could possibly buy. That is not the case, is it? You need to compare it with other houses, both those currently on the market and with the prices others sold at. 

I suspect that what has happened is that the property has been put on the market at a relatively good price, and this is what has attracted you (and several others) to it. Of course, it gets bid up to the market value. It's like starting an ebay auction at 1p. If the item is worth £100, there are lots of bids. 

You may be better off looking at other properties that are languishing on the market because they have been over-priced. You may need to make offers on several of them, but eventually you will find a motivated seller - perhaps he's found his dream house - and you'll be the only person offering. 

AdrianC

What offer will leave you hacked off if somebody else offers a bit more, so you don't get it?

What offer will leave you wincing in regret if it turns out to be highest, and you get it?

Somewhere between those two.

Barmy_Army_92

There are only 5 other houses on the street of the same design. One sold 3 years ago for 120k. I've done some quick rudimentary maths. Comparing the previously sold property to the one under offer. The general decor etc is of a much higher standard across the house, and there is a more open plan downstairs space as well. So on this maths the asking price is about right. We are thinking of offering up to a maximum of 5k more, aware that we may need to pay this difference with the original valuation of 170k, as the lender may not agree with that price. 

•  5% Extension
• 20% property price rise
• 10% new kitchen and bathroom
• 5% garage

Dadto3Boys

The lender is might be your saving grace, especially if you have a small deposit.
They will tell you how much they think it is worth, once you have secured the house you can lower the offer and state this is all the bank think it is worth. Just be ready to go through with the higher offer, if the bank does agree.

Only offer what you would be comfortable paying.

Slithery

What a similar property sold for 3 years ago is irrelevant.
You need to look at recent comparable sold prices (not asking prices).