Best Offers - How high to go?

jenni_fer

We put an asking price offer in on a property yesterday, having viewed late Friday to be told that there had already been an asking price offer. We're therefore expecting to be told tomorrow that we need to come back with a best offer. This isn't a situation we've been in before and we don't have a clue what to do!

We really like the house, location is great for us and with some work we think it could be the forever home. BUT, we obviously don't want to offer way over asking because it does need quite a bit of work.

My question is, for those of you who have been either side of this situation before....how much above asking would you offer? How much is it likely to come down to an additional couple of thousand pounds vs the position of the buyers?

For context, asking price is £575k, has a very obvious development opportunity so there may well be interest from developers not just families.
We have a cash buyer who would exchange tomorrow if we were ready to, but we are also happy to wait while the vendor of this property sorts her onward move (in with family) out and not put any pressure on.

What would you do???

Windofchange

Impossible to say. Who knows what others might offer. I guess ultimately you have to offer what it is worth to you. We had a similar situation, though it wasn’t best and final, but went 5k over asking on a price not too dissimilar to yours and that did it. You might be best to position yourself over other buyers as the vendor might not always take the highest bid if you are the most attractive proposition - I.e cash buyer or all your ducks in a row with mortgage and deposit vs someone who needs to sell their property still or is a high LTV etc. If I were selling a house, unless someone offered massively more than the others I would certainly take the most certain bid rather than a few grand more for potentially a load of hassle and the sale falling through. Can’t imagine anyone would think too differently to that?

Before you offer, be certain that you can back it up however - the bank may not agree with a hugely over asking price bid, therefore when it comes to valuation you may be left with a large amount of money to top up yourselves. Fine if you aren’t pushing your affordability to the max, but if you are then it could all fall through because of that. 

datlex

It is possible the vendor may just accept the asking price offer and not consider any others.

anselld

Personally I hate bidding wars.   Many of them are imaginary EA games anyway.   I get very suspicious when asking price offers come along like London busses, especially after a decent time on market.

I would just re-itterate that you have made an asking price offer that stands with the other benefits of your position you have listed.

jenni_fer

anselld said:

Personally I hate bidding wars.   Many of them are imaginary EA games anyway.   I get very suspicious when asking price offers come along like London busses, especially after a decent time on market.

I would just re-itterate that you have made an asking price offer that stands with the other benefits of your position you have listed.

We were one of at least 4 viewers on the first viewing slot they had available so i do believe they have had another offer.

jenni_fer

@Windofchange thanks for the comments, we can most definitely back it up and LTV is quite low so the mortgage company aren't likely to be that bothered.

I'm hoping you are right and it's position and commitment that sway it not a couple of thousand pounds.

@datlex, two asking price offers on the same day, I can't imagine they would do anything other than see if anyone wants to up their offer?

MysteryMe

There is no mystery to the process. You weigh up what price you would be comfortable offering, taking into account what work needs doing and how the property compares to similar sold properties in the area. There is no point over paying, there will always be other houses. When submitting your offer you can say what your position is as the vendor may be more motivated by ease or speed of transaction than going purely with highest bid.

I helped my mum sell her house, we had 2 asking price offers so I told the agent to go back to both and ask for best and final. I was not interested in a bidding war with creeping bids from both parties. In my case it didn't matter whether the buyer was a FTB or in a chain as mum didn't have an onward purchase dependant on the sale. In the end one buyer kept to their original offer and they other offered £1500 more, they got the house.

t2havock

If it’ll be your forever home, I would Offer the most you can afford. Get it and you overpaid won’t matter, as it’s your forever home. Miss out and you know you just couldn’t afford it. Don’t forget to write a letter to the vendors telling them why you love the house and how you could see it being your home too. Most likely, they’ve loved their home and want to know it’s going to someone who’ll love it just as much. You can use sold prices on Rightmove and Online valuation tools to help guide you too. Does the EA themselves have an online valuation tool? Usually that tells you the range of what they’d be reasonably expecting. Yourmove seems to give conservative estimates and Zoopla’s online valuation gives more generous estimates 

Ramouth

I’m another who thinks if you really love it and think you will be there long term then offer what is is worth to you.

We did this, paid far too much, don’t regret it one bit.

nicknameless

Going through the same process.  Offering on a house we viewed at the weekend tomorrow advertised OIEO.  We lost out on a house a few weeks back priced the same.  This house is better and so we are going to offer the max we feel happy paying which is just over 5% over the OIEO amount.

Fingers crossed for you (and us!).

lookstraightahead

I would offer nothing over asking price. I wouldn't do it in a shop, or buying a car, or paying fir a holiday, and I won't do it on a house. 

it's all a game.