Best offer? Help

[Deleted User]

@YRazor - I hear you. It's difficult when a property has had a lot of interest. The amount I've been thinking of is 17% over the valuation. It's at the top end for me, but I'm nervous that I won't secure the property with less...but also nervous that I could lose a few grand just by offering a higher amount if no one else does. A total guessing game. I suppose it's a balance. What is it worth to you? What amount will potentially give you the edge but also is realistic in terms of mortgage? All you can do is offer based on those questions and if you don't get it, then it wasn't meant to be.

NameUnavailable

YRazor said:

We have finally viewed a house that my Wife and I like, It is listed at 385 - 400K, we have made an offer of 390K.
Just got a call from the estate agent stating that everyone who viewed made an offer and the seller has asked everyone to make their 'best offer'
 and get back to them by Wednesday.

erm, what do we do, what does it even mean? is this a common tactic, ploy to get more money?
We are first time buyers, love the house and plan to live in it for the foreseeable.
I had said straight after the viewing that if we ended up in a bidding war i'd be happy to go to 400K but the way its panned out it seems like some weird game show and for all we know we already have the highest offer.

It is a tactic to get the highest offer by creating a one chance 'bidding war' (although you might find that they come back to say your offer was the same as a few others and they're giving everyone another 'final' chance.....).

It's due to greedy vendors. 

Whatever you bid, if you are borrowing then it still depends on the mortgage valuation and of course what comes back on the survey. So, you could take the view that you bid high to 'win' fully intending to negotiate back down to a more realistic priced based on the valuation and any unexpected works that are found in the survey.

YRazor

I am borrowing @Crashy_Time

NameUnavailable said:

YRazor said:

We have finally viewed a house that my Wife and I like, It is listed at 385 - 400K, we have made an offer of 390K.
Just got a call from the estate agent stating that everyone who viewed made an offer and the seller has asked everyone to make their 'best offer'
 and get back to them by Wednesday.

erm, what do we do, what does it even mean? is this a common tactic, ploy to get more money?
We are first time buyers, love the house and plan to live in it for the foreseeable.
I had said straight after the viewing that if we ended up in a bidding war i'd be happy to go to 400K but the way its panned out it seems like some weird game show and for all we know we already have the highest offer.

It is a tactic to get the highest offer by creating a one chance 'bidding war' (although you might find that they come back to say your offer was the same as a few others and they're giving everyone another 'final' chance.....).

It's due to greedy vendors. 

Whatever you bid, if you are borrowing then it still depends on the mortgage valuation and of course what comes back on the survey. So, you could take the view that you bid high to 'win' fully intending to negotiate back down to a more realistic priced based on the valuation and any unexpected works that are found in the survey.

Really appreciate the input, is that I suppose some kind of safety blanket then that lenders wouldn't let us pay 'way' over the odds. 
Edit: I mean a safety blanket to protect themselves (the lender) which can also work in the buyers favour.

kormacurry

I was recently in a similar position; I viewed a house and made a offer of (cash) for the full asking price during the viewing.  I heard nothing till 2 days later that there were 2 other offers for the same amount and the agent said that it was going to 'best offers'. I increased my offer by £10k. The agent phoned me after this and said that the other 2 bidders had increased by the exact same amount but the buyer had chosen my bid as I could proceed faster.  I pulled out hours later after the vendor insisted he wanted even more money for the fitted kitchen otherwise he was stripping it out.  Funnily enough, the house went back on the open market and is still on now for the original lower price.  Makes me wonder where the other 2 buyers went to? I strongly suspect that there may have been bids offered but not as high as the agent claimed. Frankly I feel relieved that I backed out.  

My advice would be to offer only what you are truly comfortable with. As chain free buyers you have an advantage.

AdrianC

What figure will make you think...
* If you win: "Phew! We got it, and while we're paying more than we'd like, we're not overstretched"
AND
* If you lose: "Well, so be it. We wouldn't have paid that much. Good luck to them."
...?

That figure is your final offer.

BTW, placing a final offer, then trying to chisel down later? That is going to see you having your vendor tell you to shove it and even walk away, if they've got any sense...

YRazor

kormacurry said:

I was recently in a similar position; I viewed a house and made a offer of (cash) for the full asking price during the viewing.  I heard nothing till 2 days later that there were 2 other offers for the same amount and the agent said that it was going to 'best offers'. I increased my offer by £10k. The agent phoned me after this and said that the other 2 bidders had increased by the exact same amount but the buyer had chosen my bid as I could proceed faster.  I pulled out hours later after the vendor insisted he wanted even more money for the fitted kitchen otherwise he was stripping it out.  Funnily enough, the house went back on the open market and is still on now for the original lower price.  Makes me wonder where the other 2 buyers went to? I strongly suspect that there may have been bids offered but not as high as the agent claimed. Frankly I feel relieved that I backed out.  

My advice would be to offer only what you are truly comfortable with. As chain free buyers you have an advantage.

Thanks @kormacurry
Reading the experiences of yourself and others really has helped give some clarity on the situation and I appreciate it, this process has been very off putting and if our offer was to be accepted, any funny business and we are out.

AdrianC said:

What figure will make you think...
* If you win: "Phew! We got it, and while we're paying more than we'd like, we're not overstretched"
AND
* If you lose: "Well, so be it. We wouldn't have paid that much. Good luck to them."
...?

That figure is your final offer.

BTW, placing a final offer, then trying to chisel down later? That is going to see you having your vendor tell you to shove it and even walk away, if they've got any sense...

 @AdrianC
Thank you very much, I think that is solid advice. After sleeping on it I think the Wife and I are now at ease with a figure to offer which falls into the "Phew" and "Well, so be it" area in our mental Venn diagram.