Best Offers - How high to go?

Tokmon

thriftytracey said:

Tokmon said:

thriftytracey said:

Here is our experience.

We want to relocate to a desirable area where houses are in short supply.  We had been searching since April and this would be our forever home.  In July we finally viewed a bungalow that ticked quite a few boxes (not all and we have made compromises in our searches) and was in a great location (a probate sale).  We knew it would go to best and final.  I wrote a long letter to the EA offering £15k over the asking price of £350k and emphasising we were in a short chain and did not need a mortgage  The property needed new kitchen and bathrooms (and it really did need them it wasn't just a case of not to our taste).  We did not win and I imagine the successful buyer probably offered £25k over.  

We were gutted and my husband admitted to me today he was still depressed about it.  But you have to draw the line somewhere.  Yes, we wanted the property but not at any price.  However, at the end of the day money wins every time.  There were several beneficiaries and they went for the maximum amount they could get.

Since then there has been nothing - the very few new properties since have been apartments or terraced houses.

I am resigned now to not moving.  We don't want to move to another area.  I will be calling the estate agent tomorrow to advise that although we are still looking in September we have a long holiday booked which we intend to take.  If we lose our buyer so be it.  If we do then I think we will take the house off the market and wait until the market is calmer whenever that will be .....

Why did you write a letter? I wouldn't recommend this because the market these days is so fast moving you need to view a house make an offer and get it accepted asap. There isn't really time to write letters and the EA can just be told all the relevant information over the phone when making the offer.

Well - we were told to submit bids either by email or letter!  We chose letter method because we couldn't get phone signal very well whilst in the location on holiday.

"Further to our recent conversations, you are now aware there has been considerable interest shown in the above property and after consultation with the vendor it has been agreed to request “Best & Final Offers”.

This is to either arrive at our XXXXX Office in a sealed envelope or by email on or before Monday 26th July 2012 by 12 noon. Please mark your envelope/email “ XXXXXXX".

Final offers by email to xxxxxxxxxx or post  Webbers Estate Agents, xxxxxxxxxxxxxxxxxxxxxxxxxxx

Your letter/email should include the following:-

1. Offer Price

2. Full details of your financial situation ie; cash or percentage of mortgage required

3. Is the purchase subject to the sale of another property, if so, please state the current situation and supply details of your estate agent

4. Desired timescale/completion dates.

5. Will the purchase be subject to a survey

 We hope the above information is clear, however, if you have any queries then please do not hesitate to contact us at the xxxxx Office Finally, we would like to thank you for your patience, but hope you will appreciate that in a situation such as this, a sealed offer is the only fair and professional way in which to handle the situation.  Following the offers we will be in discussions with our Vendor and will contact you on as soon as we have a decision.

 

That's interesting because that's very different to my experience earlier this year. I got asked to offer over the phone 2 days after viewing (they said during the viewing they would be calling) and then after a couple calls they accepted my offer the same day on the condition that i email them the documents needed to prove my position (proof of funds, ID etc.) that evening so they could review them the next morning. My quick response and willingness to work around the vendors circumstances is what secured the property at a good price for me. I certainly wouldn't have got it if it had gone to best & final offers!

Greymug

arrows123 said:

Just to add to my previous post, one of the ones I lost out on by literally 5 mins, the sellers had set a deadline for offers of 5.30pm.

Was told by the agent, they aren’t greedy etc etc. My offer was highest at 5.25pm of £291k then someone came in, in the last five mins and bid £307k and sellers accepted it. Ten days ago I got a call from the agents.. it had fallen through and would I still be interested. I said no and it went back on the market for £10K more than the original asking price and is showing sstc again. 

Even if you don’t win at best and final things can and do fall through. 

When asked if you were still interested, you should have said yes but offered a lower price. Worth a shot

nicknameless

BV88 said:

 We were involved in a few of these blind bidding wars, here is what I learnt taking part and what I would consider the ‘best’ strategy of maximising your chances of getting the property at a reasonable price (although it’s morally questionable).

Firstly, you need to consider how the EA and vendor will view all offers, usually with three primary considerations:

1. How proceedable is the buyer 
2. Price 
3. Other relevant factors important to the vendor, such as flexibility/patience in finding their next place etc.

You need to attack all three in this game and point three requires some digging/probing of the EA.

When making your offer do the following:

- Include proof of your deposit (ideally at a good LTV such as 25% to 40%), this could be proof of the equity in your current property if you have not yet sold
- Include your AIP
- Include the name and contact details of your solicitor 

All the above tells the EA you are a serious and organised buyer and they will paint your offer in a good light.

For the price, and this is the controversial bit, pick a number you think will blow the competition out of the water. However, you will use a safety net of the mortgage valuation. By going very aggressive on your offer you will likely get downvalued. Now, you use this as your window to renegotiate the price, likely splitting the difference between your offer and the valuation. 

It’s high risk as some vendors may walk at this point but if you have offered the highest bid then the EA will likely be explaining to them that any other mortgage buyers will all face the same issue as you. Here you risk losing out to a cash buyer that you beat with your bid but if they exist in the blind bidding war you have to do something to get the upper hand! If the bank comes back without a downvalue then you can sleep easy knowing your offer was right on the money. 

Now you give the EA a call and start digging about the vendor, find out what is important to them, ask about their future move etc. If they haven’t found anywhere say you are willing to wait, give them flexibility etc. It could be something else, granny lives around the corner, they love gardening and so do you, and so on… We love dogs and I can tell you when we sold if there was someone in the bidding war who said their golden retriever couldn’t wait to use the garden it would probably have been worth £5k to us! Residential properties are not just financial assets, they are emotional connections. 

But you have to do the digging with the EA and if you are local use your connections to find out about the sellers.

I didn’t use this strategy in it’s entirety but elements of it, yes it’s not entirely moral but it does stack the odds in your favour in a highly competitive market.

The main thing I learnt in these bidding wars is they are a load of rubbish. You give your BAFO then the EA calls asking if you want to raise your BAFO to beat someone else’s BAFO! Best way to see that off is to deliver a killer blow from the start, but with the intention of renegotiating post a down valuation. 

This is all an art not a science and many will criticise this approach and I’m not saying it’s ‘right’. It is however what I learnt from taking part in 6+ bidding wars from October 2020 to April 2021 in one of the red hot, second home coastal areas (of which I am a local not a second home buyer). 

Best of luck! 

And you and people like you are why sales fall through and others with more moral fibre are losing out in the process.  Call me naive but I find that *****y

lonibra

You offer what it's worth to you. Unfortunately the current market is such that people are willing to pay a lot to get the house they want so you may not win, especially if it's a desirable family home. 

Vendors want the most they can get, naturally, and it's the EA (working for them) who tries to make that happen with all these bidding games.

Gavin83

BV88 said:

 We were involved in a few of these blind bidding wars, here is what I learnt taking part and what I would consider the ‘best’ strategy of maximising your chances of getting the property at a reasonable price (although it’s morally questionable).

Firstly, you need to consider how the EA and vendor will view all offers, usually with three primary considerations:

1. How proceedable is the buyer 
2. Price 
3. Other relevant factors important to the vendor, such as flexibility/patience in finding their next place etc.

You need to attack all three in this game and point three requires some digging/probing of the EA.

When making your offer do the following:

- Include proof of your deposit (ideally at a good LTV such as 25% to 40%), this could be proof of the equity in your current property if you have not yet sold
- Include your AIP
- Include the name and contact details of your solicitor 

All the above tells the EA you are a serious and organised buyer and they will paint your offer in a good light.

For the price, and this is the controversial bit, pick a number you think will blow the competition out of the water. However, you will use a safety net of the mortgage valuation. By going very aggressive on your offer you will likely get downvalued. Now, you use this as your window to renegotiate the price, likely splitting the difference between your offer and the valuation. 

It’s high risk as some vendors may walk at this point but if you have offered the highest bid then the EA will likely be explaining to them that any other mortgage buyers will all face the same issue as you. Here you risk losing out to a cash buyer that you beat with your bid but if they exist in the blind bidding war you have to do something to get the upper hand! If the bank comes back without a downvalue then you can sleep easy knowing your offer was right on the money. 

Now you give the EA a call and start digging about the vendor, find out what is important to them, ask about their future move etc. If they haven’t found anywhere say you are willing to wait, give them flexibility etc. It could be something else, granny lives around the corner, they love gardening and so do you, and so on… We love dogs and I can tell you when we sold if there was someone in the bidding war who said their golden retriever couldn’t wait to use the garden it would probably have been worth £5k to us! Residential properties are not just financial assets, they are emotional connections. 

But you have to do the digging with the EA and if you are local use your connections to find out about the sellers.

I didn’t use this strategy in it’s entirety but elements of it, yes it’s not entirely moral but it does stack the odds in your favour in a highly competitive market.

The main thing I learnt in these bidding wars is they are a load of rubbish. You give your BAFO then the EA calls asking if you want to raise your BAFO to beat someone else’s BAFO! Best way to see that off is to deliver a killer blow from the start, but with the intention of renegotiating post a down valuation. 

This is all an art not a science and many will criticise this approach and I’m not saying it’s ‘right’. It is however what I learnt from taking part in 6+ bidding wars from October 2020 to April 2021 in one of the red hot, second home coastal areas (of which I am a local not a second home buyer). 

Best of luck! 

Were I your vendor when the EA rung me to
tell me of the down valuation I’d be telling them to stop the sale and re-market the property, even if you then honoured your original offer. I wouldn’t accept being messed around and I’d rather sell to someone who was honest from the start.

And yes, I’d do this even if it meant losing a house myself. However I am admittedly quite stubborn but I am at least a man of my word.

lookstraightahead

Gavin83 said:

BV88 said:

 We were involved in a few of these blind bidding wars, here is what I learnt taking part and what I would consider the ‘best’ strategy of maximising your chances of getting the property at a reasonable price (although it’s morally questionable).

Firstly, you need to consider how the EA and vendor will view all offers, usually with three primary considerations:

1. How proceedable is the buyer 
2. Price 
3. Other relevant factors important to the vendor, such as flexibility/patience in finding their next place etc.

You need to attack all three in this game and point three requires some digging/probing of the EA.

When making your offer do the following:

- Include proof of your deposit (ideally at a good LTV such as 25% to 40%), this could be proof of the equity in your current property if you have not yet sold
- Include your AIP
- Include the name and contact details of your solicitor 

All the above tells the EA you are a serious and organised buyer and they will paint your offer in a good light.

For the price, and this is the controversial bit, pick a number you think will blow the competition out of the water. However, you will use a safety net of the mortgage valuation. By going very aggressive on your offer you will likely get downvalued. Now, you use this as your window to renegotiate the price, likely splitting the difference between your offer and the valuation. 

It’s high risk as some vendors may walk at this point but if you have offered the highest bid then the EA will likely be explaining to them that any other mortgage buyers will all face the same issue as you. Here you risk losing out to a cash buyer that you beat with your bid but if they exist in the blind bidding war you have to do something to get the upper hand! If the bank comes back without a downvalue then you can sleep easy knowing your offer was right on the money. 

Now you give the EA a call and start digging about the vendor, find out what is important to them, ask about their future move etc. If they haven’t found anywhere say you are willing to wait, give them flexibility etc. It could be something else, granny lives around the corner, they love gardening and so do you, and so on… We love dogs and I can tell you when we sold if there was someone in the bidding war who said their golden retriever couldn’t wait to use the garden it would probably have been worth £5k to us! Residential properties are not just financial assets, they are emotional connections. 

But you have to do the digging with the EA and if you are local use your connections to find out about the sellers.

I didn’t use this strategy in it’s entirety but elements of it, yes it’s not entirely moral but it does stack the odds in your favour in a highly competitive market.

The main thing I learnt in these bidding wars is they are a load of rubbish. You give your BAFO then the EA calls asking if you want to raise your BAFO to beat someone else’s BAFO! Best way to see that off is to deliver a killer blow from the start, but with the intention of renegotiating post a down valuation. 

This is all an art not a science and many will criticise this approach and I’m not saying it’s ‘right’. It is however what I learnt from taking part in 6+ bidding wars from October 2020 to April 2021 in one of the red hot, second home coastal areas (of which I am a local not a second home buyer). 

Best of luck! 

Were I your vendor when the EA rung me to
tell me of the down valuation I’d be telling them to stop the sale and re-market the property, even if you then honoured your original offer. I wouldn’t accept being messed around and I’d rather sell to someone who was honest from the start.

And yes, I’d do this even if it meant losing a house myself. However I am admittedly quite stubborn but I am at least a man of my word.

But also look at vendor behaviour (or EA behaviour). There are problems from both and the vendor's approach often gives way to this type of response. 

It's awful all round. Why can't vendors accept fair offers, from serious people, rather than bleeding people dry, and buyers be honest about their financial situations? 

BV88

nicknameless said:

BV88 said:

 We were involved in a few of these blind bidding wars, here is what I learnt taking part and what I would consider the ‘best’ strategy of maximising your chances of getting the property at a reasonable price (although it’s morally questionable).

Firstly, you need to consider how the EA and vendor will view all offers, usually with three primary considerations:

1. How proceedable is the buyer 
2. Price 
3. Other relevant factors important to the vendor, such as flexibility/patience in finding their next place etc.

You need to attack all three in this game and point three requires some digging/probing of the EA.

When making your offer do the following:

- Include proof of your deposit (ideally at a good LTV such as 25% to 40%), this could be proof of the equity in your current property if you have not yet sold
- Include your AIP
- Include the name and contact details of your solicitor 

All the above tells the EA you are a serious and organised buyer and they will paint your offer in a good light.

For the price, and this is the controversial bit, pick a number you think will blow the competition out of the water. However, you will use a safety net of the mortgage valuation. By going very aggressive on your offer you will likely get downvalued. Now, you use this as your window to renegotiate the price, likely splitting the difference between your offer and the valuation. 

It’s high risk as some vendors may walk at this point but if you have offered the highest bid then the EA will likely be explaining to them that any other mortgage buyers will all face the same issue as you. Here you risk losing out to a cash buyer that you beat with your bid but if they exist in the blind bidding war you have to do something to get the upper hand! If the bank comes back without a downvalue then you can sleep easy knowing your offer was right on the money. 

Now you give the EA a call and start digging about the vendor, find out what is important to them, ask about their future move etc. If they haven’t found anywhere say you are willing to wait, give them flexibility etc. It could be something else, granny lives around the corner, they love gardening and so do you, and so on… We love dogs and I can tell you when we sold if there was someone in the bidding war who said their golden retriever couldn’t wait to use the garden it would probably have been worth £5k to us! Residential properties are not just financial assets, they are emotional connections. 

But you have to do the digging with the EA and if you are local use your connections to find out about the sellers.

I didn’t use this strategy in it’s entirety but elements of it, yes it’s not entirely moral but it does stack the odds in your favour in a highly competitive market.

The main thing I learnt in these bidding wars is they are a load of rubbish. You give your BAFO then the EA calls asking if you want to raise your BAFO to beat someone else’s BAFO! Best way to see that off is to deliver a killer blow from the start, but with the intention of renegotiating post a down valuation. 

This is all an art not a science and many will criticise this approach and I’m not saying it’s ‘right’. It is however what I learnt from taking part in 6+ bidding wars from October 2020 to April 2021 in one of the red hot, second home coastal areas (of which I am a local not a second home buyer). 

Best of luck! 

And you and people like you are why sales fall through and others with more moral fibre are losing out in the process.  Call me naive but I find that *****y

I didn’t use the down valuation part of the strategy. I was the one losing out on property after property in my home town because I was naive to the lengths people will go in an extreme demand/supply imbalance. In fact I had a down valuation and while the EA expected us to renegotiate as that’s basically happening on every single transaction here we just stumped up the money. However we were fortunate to find a seller that valued other things over the maximum price and instructed the EA not to take it to sealed bids. When we sold our smaller house in the same area we also said no sealed bids as one of the buyers was cash and that was worth more to us then the extra few £k. 

I am simply sharing my experience of this warped market. Many people will walk away or be stubborn and not negotiate, but others are pragmatic and don’t want to risk losing their own purchase by starting from square one again. I never said it was the right thing to do but rather presenting an option of how to maximise your chances of winning/securing a home. When your home town has an influx of second home buyers and you have lost your fifth straight bidding war, you may take a different view… By the way maybe one of the 6 bidding wars that was called ‘sealed bids’ actually was. Most of them the sealed bids were just the starting pistol after which the EA rang around all
the bidders offering to beat the current highest bid. It’s these tactics that give rise to the response I suggested.

Gavin83

lookstraightahead said:

Gavin83 said:

BV88 said:

 We were involved in a few of these blind bidding wars, here is what I learnt taking part and what I would consider the ‘best’ strategy of maximising your chances of getting the property at a reasonable price (although it’s morally questionable).

Firstly, you need to consider how the EA and vendor will view all offers, usually with three primary considerations:

1. How proceedable is the buyer 
2. Price 
3. Other relevant factors important to the vendor, such as flexibility/patience in finding their next place etc.

You need to attack all three in this game and point three requires some digging/probing of the EA.

When making your offer do the following:

- Include proof of your deposit (ideally at a good LTV such as 25% to 40%), this could be proof of the equity in your current property if you have not yet sold
- Include your AIP
- Include the name and contact details of your solicitor 

All the above tells the EA you are a serious and organised buyer and they will paint your offer in a good light.

For the price, and this is the controversial bit, pick a number you think will blow the competition out of the water. However, you will use a safety net of the mortgage valuation. By going very aggressive on your offer you will likely get downvalued. Now, you use this as your window to renegotiate the price, likely splitting the difference between your offer and the valuation. 

It’s high risk as some vendors may walk at this point but if you have offered the highest bid then the EA will likely be explaining to them that any other mortgage buyers will all face the same issue as you. Here you risk losing out to a cash buyer that you beat with your bid but if they exist in the blind bidding war you have to do something to get the upper hand! If the bank comes back without a downvalue then you can sleep easy knowing your offer was right on the money. 

Now you give the EA a call and start digging about the vendor, find out what is important to them, ask about their future move etc. If they haven’t found anywhere say you are willing to wait, give them flexibility etc. It could be something else, granny lives around the corner, they love gardening and so do you, and so on… We love dogs and I can tell you when we sold if there was someone in the bidding war who said their golden retriever couldn’t wait to use the garden it would probably have been worth £5k to us! Residential properties are not just financial assets, they are emotional connections. 

But you have to do the digging with the EA and if you are local use your connections to find out about the sellers.

I didn’t use this strategy in it’s entirety but elements of it, yes it’s not entirely moral but it does stack the odds in your favour in a highly competitive market.

The main thing I learnt in these bidding wars is they are a load of rubbish. You give your BAFO then the EA calls asking if you want to raise your BAFO to beat someone else’s BAFO! Best way to see that off is to deliver a killer blow from the start, but with the intention of renegotiating post a down valuation. 

This is all an art not a science and many will criticise this approach and I’m not saying it’s ‘right’. It is however what I learnt from taking part in 6+ bidding wars from October 2020 to April 2021 in one of the red hot, second home coastal areas (of which I am a local not a second home buyer). 

Best of luck! 

Were I your vendor when the EA rung me to
tell me of the down valuation I’d be telling them to stop the sale and re-market the property, even if you then honoured your original offer. I wouldn’t accept being messed around and I’d rather sell to someone who was honest from the start.

And yes, I’d do this even if it meant losing a house myself. However I am admittedly quite stubborn but I am at least a man of my word.

But also look at vendor behaviour (or EA behaviour). There are problems from both and the vendor's approach often gives way to this type of response. 

It's awful all round. Why can't vendors accept fair offers, from serious people, rather than bleeding people dry, and buyers be honest about their financial situations? 

I'm not really sure why it's the vendors fault. They list their house at a price that the EA suggests, which is generally fair. If buyers come along and offer way over this asking price the EA nor the vendor has any control over that. You could certainly argue that EAs encourage it (I wouldn't disagree) but they have no control over what people actually offer and they have to pass the offer on. You also can't really blame vendors for accepting the best offer, why wouldn't they?

I have every sympathy for buyers who offer the asking price and still get a down valuation. I have no sympathy for buyers who over offer. As an example if a house is listed at £250k then the buyer should expect the lenders valuation to come back at £250k. If they choose to offer £270k then they should be fully prepared to find that £20k from their own pockets rather than expecting to re-negotiate later. If the lender came back with a £270k valuation then they should consider that a bonus.

I also think vendors who later accept a higher offer are scumbags. Once a deal is made it should be stuck to IMO, unless the circumstances change. If I was selling once I'd accepted an offer I'd definitely stick to it, regardless of what else came along, unless of course the buyer messed me about. 

grumiofoundation

lookstraightahead said:

Gavin83 said:

BV88 said:

 We were involved in a few of these blind bidding wars, here is what I learnt taking part and what I would consider the ‘best’ strategy of maximising your chances of getting the property at a reasonable price (although it’s morally questionable).

Firstly, you need to consider how the EA and vendor will view all offers, usually with three primary considerations:

1. How proceedable is the buyer 
2. Price 
3. Other relevant factors important to the vendor, such as flexibility/patience in finding their next place etc.

You need to attack all three in this game and point three requires some digging/probing of the EA.

When making your offer do the following:

- Include proof of your deposit (ideally at a good LTV such as 25% to 40%), this could be proof of the equity in your current property if you have not yet sold
- Include your AIP
- Include the name and contact details of your solicitor 

All the above tells the EA you are a serious and organised buyer and they will paint your offer in a good light.

For the price, and this is the controversial bit, pick a number you think will blow the competition out of the water. However, you will use a safety net of the mortgage valuation. By going very aggressive on your offer you will likely get downvalued. Now, you use this as your window to renegotiate the price, likely splitting the difference between your offer and the valuation. 

It’s high risk as some vendors may walk at this point but if you have offered the highest bid then the EA will likely be explaining to them that any other mortgage buyers will all face the same issue as you. Here you risk losing out to a cash buyer that you beat with your bid but if they exist in the blind bidding war you have to do something to get the upper hand! If the bank comes back without a downvalue then you can sleep easy knowing your offer was right on the money. 

Now you give the EA a call and start digging about the vendor, find out what is important to them, ask about their future move etc. If they haven’t found anywhere say you are willing to wait, give them flexibility etc. It could be something else, granny lives around the corner, they love gardening and so do you, and so on… We love dogs and I can tell you when we sold if there was someone in the bidding war who said their golden retriever couldn’t wait to use the garden it would probably have been worth £5k to us! Residential properties are not just financial assets, they are emotional connections. 

But you have to do the digging with the EA and if you are local use your connections to find out about the sellers.

I didn’t use this strategy in it’s entirety but elements of it, yes it’s not entirely moral but it does stack the odds in your favour in a highly competitive market.

The main thing I learnt in these bidding wars is they are a load of rubbish. You give your BAFO then the EA calls asking if you want to raise your BAFO to beat someone else’s BAFO! Best way to see that off is to deliver a killer blow from the start, but with the intention of renegotiating post a down valuation. 

This is all an art not a science and many will criticise this approach and I’m not saying it’s ‘right’. It is however what I learnt from taking part in 6+ bidding wars from October 2020 to April 2021 in one of the red hot, second home coastal areas (of which I am a local not a second home buyer). 

Best of luck! 

Were I your vendor when the EA rung me to
tell me of the down valuation I’d be telling them to stop the sale and re-market the property, even if you then honoured your original offer. I wouldn’t accept being messed around and I’d rather sell to someone who was honest from the start.

And yes, I’d do this even if it meant losing a house myself. However I am admittedly quite stubborn but I am at least a man of my word.

But also look at vendor behaviour (or EA behaviour). There are problems from both and the vendor's approach often gives way to this type of response. 

It's awful all round. Why can't vendors accept fair offers, from serious people, rather than bleeding people dry, and buyers be honest about their financial situations? 

How do you define a 'fair' offer though? 

If you listed a property for 200k, which you thought was fair, and someone offered 205k would you only ask them to pay 200k?

Or would you insist of selling to them for 180k as 10% under is a fair offer to you? (ok yes I am playing silly beggars with that)
But does somewhat show the absurdity of expecting every house buying transaction to be 'equal' unless of course you can force vendors to list at a fair price (however defined)  and prevent me (as a buyer) offering above said fair price.

lookstraightahead

grumiofoundation said:

lookstraightahead said:

Gavin83 said:

BV88 said:

 We were involved in a few of these blind bidding wars, here is what I learnt taking part and what I would consider the ‘best’ strategy of maximising your chances of getting the property at a reasonable price (although it’s morally questionable).

Firstly, you need to consider how the EA and vendor will view all offers, usually with three primary considerations:

1. How proceedable is the buyer 
2. Price 
3. Other relevant factors important to the vendor, such as flexibility/patience in finding their next place etc.

You need to attack all three in this game and point three requires some digging/probing of the EA.

When making your offer do the following:

- Include proof of your deposit (ideally at a good LTV such as 25% to 40%), this could be proof of the equity in your current property if you have not yet sold
- Include your AIP
- Include the name and contact details of your solicitor 

All the above tells the EA you are a serious and organised buyer and they will paint your offer in a good light.

For the price, and this is the controversial bit, pick a number you think will blow the competition out of the water. However, you will use a safety net of the mortgage valuation. By going very aggressive on your offer you will likely get downvalued. Now, you use this as your window to renegotiate the price, likely splitting the difference between your offer and the valuation. 

It’s high risk as some vendors may walk at this point but if you have offered the highest bid then the EA will likely be explaining to them that any other mortgage buyers will all face the same issue as you. Here you risk losing out to a cash buyer that you beat with your bid but if they exist in the blind bidding war you have to do something to get the upper hand! If the bank comes back without a downvalue then you can sleep easy knowing your offer was right on the money. 

Now you give the EA a call and start digging about the vendor, find out what is important to them, ask about their future move etc. If they haven’t found anywhere say you are willing to wait, give them flexibility etc. It could be something else, granny lives around the corner, they love gardening and so do you, and so on… We love dogs and I can tell you when we sold if there was someone in the bidding war who said their golden retriever couldn’t wait to use the garden it would probably have been worth £5k to us! Residential properties are not just financial assets, they are emotional connections. 

But you have to do the digging with the EA and if you are local use your connections to find out about the sellers.

I didn’t use this strategy in it’s entirety but elements of it, yes it’s not entirely moral but it does stack the odds in your favour in a highly competitive market.

The main thing I learnt in these bidding wars is they are a load of rubbish. You give your BAFO then the EA calls asking if you want to raise your BAFO to beat someone else’s BAFO! Best way to see that off is to deliver a killer blow from the start, but with the intention of renegotiating post a down valuation. 

This is all an art not a science and many will criticise this approach and I’m not saying it’s ‘right’. It is however what I learnt from taking part in 6+ bidding wars from October 2020 to April 2021 in one of the red hot, second home coastal areas (of which I am a local not a second home buyer). 

Best of luck! 

Were I your vendor when the EA rung me to
tell me of the down valuation I’d be telling them to stop the sale and re-market the property, even if you then honoured your original offer. I wouldn’t accept being messed around and I’d rather sell to someone who was honest from the start.

And yes, I’d do this even if it meant losing a house myself. However I am admittedly quite stubborn but I am at least a man of my word.

But also look at vendor behaviour (or EA behaviour). There are problems from both and the vendor's approach often gives way to this type of response. 

It's awful all round. Why can't vendors accept fair offers, from serious people, rather than bleeding people dry, and buyers be honest about their financial situations? 

How do you define a 'fair' offer though? 

If you listed a property for 200k, which you thought was fair, and someone offered 205k would you only ask them to pay 200k?

Or would you insist of selling to them for 180k as 10% under is a fair offer to you? (ok yes I am playing silly beggars with that)
But does somewhat show the absurdity of expecting every house buying transaction to be 'equal' unless of course you can force vendors to list at a fair price (however defined)  and prevent me (as a buyer) offering above said fair price.

Agree a price with the first person who puts in an offer and forget the infighting.