Offering asking price on pre-market property

InadvertentSloth

Hi,
Hoping I can get some advice/reassurance...
My partner and I are first time buyers. We have been looking to buy our first home for a short time. We have done all the preliminary checks with a mortgage adviser and have now started the exciting step of viewing properties.
An estate agent that we had done a viewing with last week contacted us to say there was a property that was not yet on the market and they thought we would be interested to see it. We went along to a viewing and really liked it! With the market the way that it is currently and all the stories we are hearing from other people with bidding wars, houses selling quickly and sometimes for over asking price and just general buyer competition; we felt like we needed to act fast as we really got a great feeling about this property and didn’t want anyone else to get a look in.
We put in an offer £5000 below asking price which was declined by the seller as the property is still not on the market. We spoke to the estate agent and have now offered asking price on the condition it will not be put on the market. The seller is considering this currently.
Are we insane to have done this? Were we too hasty and got caught up in the fear of what the market is like at the moment?
We didn’t expect to see something we liked to much so soon and I’m worried we have got carried away! We are normally really cautious with our money so this just feels a bit reckless!
I am now worrying that the asking price might be slightly above what it is actually worth and this will be an issue further down the line...

Any anecdotes, advice would be greatly appreciated!

For reference, the property is in Bristol (outskirts of the city boundaries). 

SameOldRoundabout

I think you’re worrying too much right now. The market is wild, and Bristol in particular seems to be a hot cake. Properties seem to be going over asking at the moment so you may well have made a good move. If you love it just hope they accept and deal with any potential down valuation/survey issues when they crop up. 

GDB2222

It may be that the asking price is reasonable. Or, incredibly expensive, and you are being taken for a ride. How can anyone here advise you?

musehead

Impossible to comment without knowledge of the house, asking price, the local housing market etc. Sometimes the asking price is above market value, but not always.

LAD917

If you've looked at several comparable properties and think this one is worth what you've offered, I wouldn't worry too much.  If it makes you feel better, I would've done exactly what you've done:
- first offer slightly below the asking price, positioning the offer as you're saving the seller the "hassle" of marketing the property;
- if rejected, go up to the asking price on the condition that the property isn't marketed

Both you and the seller are taking a risk.  You're risking that you've overpaying relative to what the market would bear if the property were fully marketed.  The seller is risking that they're accepting below what the market would bear if the property were fully marketed.  The risk is fairly balanced.  If you think you're only potentially overpaying by £5k, I'd venture to say that it's tilted in your favour v. the seller's.

As a seller, I recently listed a flat that took 10 days to get online.  During this period, I told the estate agents that I would only accept offers at the asking price. In the nicest possible way, I told them to do their job - fully market the property in all channels for at least two weeks before coming back to me with less than the price we just agreed.  That didn't stop lower offers from coming in, and I rejected all of them.  I eventually sold for less than ask, but more than the prices that came in without full marketing. (In the interim, most of the properties I benchmarked against had been reduced.)

As a buyer, the one additional check I do is around square footage / meterage and dimensions since there is not usually a floorplan (and I've noticed a tendency of estate agents to exaggerate / estimate on the stupidly high side).  No matter what agents say, price per square metre/foot is as close to a standard valuation metric as we have, and I like to understand that number.  The EPC register is often a good place to benchmark the square meterage, or if you're lucky, you can sometimes find an old real estate listing online.

Wes121708

@InadvertentSloth well done in getting first dibs on a property in Bristol. We're finding everything was sold before we even got a look in! Are there any other houses that have sold recently which you could compare it to so you can get an idea of how much it will go for?

wewilldoit

Tbh if anything I would be worrying they would want more, you have had the advantage over the open market and they might see you need to pay a premium for such priverlage especially in a fast selling area.

Gentoo365

How long are you planning on living there?
+/- £5k may seem not worth worrying about if you can afford it. 

Mickygg

I wouldn’t be surprised if now they put house on the market for more. I probably would if someone offered asking and I hadn’t even put it on the market yet. 

Then again they may be amazed you are willing to pay asking as they thought they would try it on at a high price.

We don’t know.