How do I stand the best chance in a bidding war

wannaberich84

We have sold our house back at the start of this year and moved into renting due to nothing being on the market we wanted, but also knowing the type of property we want will be in higher demand so wanted to look more appealing to a seller being in no chain. 

In 6 months we have viewed one property we are interested in which was yesterday. The house went on the market on Thursday and the estate agent informed us they had 14 viewings on Friday, 9 viewings yesterday and another 6 today. 

From the price and the pictures you can see the house needs a complete overhaul everything you can think of needs doing, it’s been vacant for 5 years also. The state of the house was worse in person. As of yesterday there are 2 offers on the property, it’s on at offers over and both of which are over the price it’s on for. 

We want this house, having our builder view the house tomorrow to give us a guide price on costings for work then shall make our offer. 

My question is what can we do to put ourselves ahead of everyone, we have a big deposit, renting and mortgage in principle for well over what would be needed. Shall we write a letter to the sellers, does that really help? The parents have died and it’s now the children that own the house. 

I’ve read on one website about adding an escalation clause to our offer, it was an American site is this done in the U.K.? 

Any advice would be much appreciated 

anselld

You are over-thinking it.  The only way to win is to make the highest bid. 

 If you are using a builder to do all the work you may well lose out to others bidders who are either keen diy, or have cheaper access to builders within the family, mates, etc.  However, there is nothing you can do about that.  You just need to work out what you think it is worth finished and subtract the builder quotes plus contingency and make your offer.

Are you sure it is mortgageable in the current state?

fiveacre

My question is what can we do to put ourselves ahead of everyone

Offer the highest amount.

I’ve read on one website about adding an escalation clause to our offer

No, the vendor isn't going to be interested in any nonsense like this if they already have 2 offers on the table. It wouldn't be binding anyway in England - everything is up for negotiation until contracts are exchanged.

lookstraightahead

Just offer what you are willing to pay.

if the vendor is sensible without stars in their eyes they will see you are in a good position (that is if the property is mortgageable)

even if you're not 'the chosen one' they will most likely come back to you after the other silly bidders have to pull out.

You have to obviously allow for all the work too.

this isn't normal buying and selling. Do bear that in mind. It's a bit like the toilet paper scenario with COVID. So it will settle and vendors will have to adjust to normality.

AnotherJoe

I disagree you need to offer the highest, being chain free may appeal to the sellers (or it may not, but it's worth stressing it). So you might offer somewhat less and still win if the other buyer has a chain below them, OTOH given the state of the house that seems unlikely. You will not  be mortgage free. Another buyer might be, which would be a point against you that a higher price might not compensate for. 
All you can do is offer what it's worth to you, at the price of "well if someone else paid that much more, they are welcome to it" 
i dont see how an escalation clause would work in the U.K. we don't have realtors  bidding on behalf of clients so there's obvious potential for fraud against you plus I'm not sure how it would work legally. Most likely you'd end up being asked for best and final should there be several bids.

Irishpearce26

AnotherJoe said:

I disagree you need to offer the highest, being chain free may appeal to the sellers (or it may not, but it's worth stressing it). So you might offer somewhat less and still win if the other buyer has a chain below them, OTOH given the state of the house that seems unlikely. You will not  be mortgage free. Another buyer might be, which would be a point against you that a higher price might not compensate for. 
All you can do is offer what it's worth to you, at the price of "well if someone else paid that much more, they are welcome to it" 
i dont see how an escalation clause would work in the U.K. we don't have realtors  bidding on behalf of clients so there's obvious potential for fraud against you plus I'm not sure how it would work legally. Most likely you'd end up being asked for best and final should there be several bids.

Yes but no but yes but no. 

Figure out your max budget including any 'works' needed as you have no guarantee that you can reduce the price if 'works' need to be done. If you aren't having a survey done and just having a builder with a price list then I don't see you having any strength in negotiating.

Also act fast as the other 14 may make an offer and you could lose out.

eddddy

If you try to put in an 'exotic' offer with an escalation clause, I think the EA will just tell you to change it to a simple best and final offer.

It's worth discussing with the EA what kind of final price they expect the property to go for. It's in their interests to help you.

For example...
If they expect to get offers up to about £200k, there's no point in them suggesting that you need to offer £225k - because the result is likely to be that you'll walk away. (Whereas you might have been willing to offer £205k or £210k.)



FWIW, a recent anecdote from a prospective buyer from a different angle - offers on a property had reached £70k over asking price, so the EA was suggesting to anyone needing a high LTV mortgage that it wasn't worth offering any higher, because it was already way over what the bank would value it at.

verytired11

If there have already been two other above asking offers, you need to put an offer in today above asking price to get your hat in the ring.  Then take it from there.  It sounds like it will go to best and final, so you need to then work out the maximum you can afford and/or would pay for this property.  Why do you want this house so much?  Ignore the price aspect because it has probably been put on at an under value in order to stimulate interest in what sounds like an otherwise unappealing house (needing complete renovation). If it's the perfect location then fair enough.