What to offer?

MrMaker1976

Hello,
My wife and I have found a home we like.
seems they have 25-30 enquiries about this home 2 days into it being put on the market and one offer above asking already. 

We are in a strong position, large deposit, all ready to go, no chain. Asking price is over £200k 

Any tips or suggestions? The house seems undervalued for what it is

MaryNB

Sounds like your seller put a low price on the ad to start a bidding war.

If you go in high and your lender downvalues it you should be ok with a large deposit. You just have to be sure you are still happy to pay a higher price and possibly a higher interest rate if it affects your LTV.

You need to look at recently sold properties in the area (SSTC and under offer won't show what the buyer is actually paying for). Most sold houses will be from 3+ months ago, probably more like 6 months given how slow HMLR are at the moment,  but will give you an idea of what houses are worth in the area. 
Check off street parking/garage, detatched/semi-d/terraced, recently refurbed/needs modernisation, downstairs bathroom or not etc. when you compare the house to other properties.

Before you go ahead, give yourself a maximum limit. Not how much you can spend but how much you are willing to spend to get the property. Some buyers get caught up in a bidding war and then panic a few weeks down the line because they are worried they are spending too much and then try to gazunder the seller.

AdrianC

MrMaker1976 said:

Hello,
My wife and I have found a home we like.
seems they have 25-30 enquiries about this home 2 days into it being put on the market and one offer above asking already. 

We are in a strong position, large deposit, all ready to go, no chain. Asking price is over £200k 

Any tips or suggestions? The house seems undervalued for what it is

So what do you think it's worth?

What's the breakpoint between "that's cheap" and "that's about right"?
What's the breakpoint between "that's about right" and "Ouch! Good luck..."?

MrMaker1976

MaryNB said:

Sounds like your seller put a low price on the ad to start a bidding war.

If you go in high and your lender downvalues it you should be ok with a large deposit. You just have to be sure you are still happy to pay a higher price and possibly a higher interest rate if it affects your LTV.

You need to look at recently sold properties in the area (SSTC and under offer won't show what the buyer is actually paying for). Most sold houses will be from 3+ months ago, probably more like 6 months given how slow HMLR are at the moment,  but will give you an idea of what houses are worth in the area. 
Check off street parking/garage, detatched/semi-d/terraced, recently refurbed/needs modernisation, downstairs bathroom or not etc. when you compare the house to other properties.

Before you go ahead, give yourself a maximum limit. Not how much you can spend but how much you are willing to spend to get the property. Some buyers get caught up in a bidding war and then panic a few weeks down the line because they are worried they are spending too much and then try to gazunder the seller.

This was really helpful thank you. There’s no parking, it’s a terraced house nicely done up with a loft conversion and a garden room. 

I think the lack of parking and no downstairs bathroom might actually be what has brought the price down a bit given that it’s 3 bed so thinking about resale we need to be careful to not get overexcited. 

Really appreciate the input 

MaryNB

MrMaker1976 said:

MaryNB said:

Sounds like your seller put a low price on the ad to start a bidding war.

If you go in high and your lender downvalues it you should be ok with a large deposit. You just have to be sure you are still happy to pay a higher price and possibly a higher interest rate if it affects your LTV.

You need to look at recently sold properties in the area (SSTC and under offer won't show what the buyer is actually paying for). Most sold houses will be from 3+ months ago, probably more like 6 months given how slow HMLR are at the moment,  but will give you an idea of what houses are worth in the area. 
Check off street parking/garage, detatched/semi-d/terraced, recently refurbed/needs modernisation, downstairs bathroom or not etc. when you compare the house to other properties.

Before you go ahead, give yourself a maximum limit. Not how much you can spend but how much you are willing to spend to get the property. Some buyers get caught up in a bidding war and then panic a few weeks down the line because they are worried they are spending too much and then try to gazunder the seller.

This was really helpful thank you. There’s no parking, it’s a terraced house nicely done up with a loft conversion and a garden room. 

I think the lack of parking and no downstairs bathroom might actually be what has brought the price down a bit given that it’s 3 bed so thinking about resale we need to be careful to not get overexcited. 

Really appreciate the input 

There is a balance between worrying about resale value and buying what actually works for you. I bought a house with no upstairs bathroom, and also no bath. But for me the larger spare room was more important than a upstairs toilet because I want to get a lodger at some point. Any other similar houses in the area with an upstairs bathroom had a tiny second bedroom. Also I have no plans to have children so the lack of bath didn't bother me. But I know the lack of upstairs bathroom put off a lot of people and a lack of bath can be a dealbreaker for some parents. 

arrows123

I've been involved in this type of situation 3 times in the last 7 weeks, losing out on all three times. Two went to "best and final" (ended up £25,000 over) and one went for £22,000 over the asking price (almost 10%) over with 30mins before the decision was being made with me in the agents words "pole position". Viewings took place within 24hours and all three were SSTC within 48hrs. 

The advice above is spot on, try not to get drawn into the bidding mentality, some people have to win at all costs. I was very clear in my own mind about not regretting what my bid was for. All three times my top bid was over the asking price but I was not willing to win at all costs. I'm waiting to hear on an offer for another property where there is no bidding war, negotiations are going in a more "normal" fashion where I have had a few days to think more rationally instead of the 24hours bun fight that happened with the other three with the agents stoking the flames. I know its more than likely overpriced (it's actually more than my highest bid for the other three), everything is in this market, but it fits my brief more than any of the other three, i'm making a more conscious decision on my terms that I'm confident I won't regret. 

Good luck, I hope you get it but it's also fine to feel if it's gone to high to say "i'm out". 

mortgage_noob

I am in the process of purchasing a house marketed at 200k- 215k. I am paying £234k. 

The house needs some work doing to it but I'd some experience in the area. I offered high because the market in the area has been crazy and I wanted to nip it in the bud before viewings (I managed to get in a week early). Tthe EA did not want to take the house off the market because there were 30 viewings booked after 1 week and they like to market low to generate initial offers then go to best and final. I've been through the process a few times . Fortunately, we were in direct contact with vendor and managed to get the house marked STC. 

Maybe we are paying a little too much but we're pleased to be out of the hell of house searching in a sellers market and;  

•  I offered on a house 2 minutes away (on foot), similar configuration (but a bit smaller) marketed at £230k - very nicely done up. Offered £260 - didn't get it. 
• another house bigger this time, 2 minutes away. marketed at £270-280 - offered £295, didn't get it.
• Another house 10 mins down the road, in need of total renovation marketed at 170k, offered £232k, didn't win went for £250k

Anyway, the RICS survey valued at 225k but said it was hard to value with the market as it is and with lots of sales agreed during the frenzy that haven't yet completed. The surveyor said we are paying a 'full price'  but if we tried to negotiate the vendor could relist and sell to someone else for the same price. He was interested to hear what the bank said. Bank did a desktop valuation - no issues.


In short, it depends on the market in the area.