Providing your AIP and proof of deposit in an offer

Victorrrria

Hi there, I have just started house-hunting and realising how competitive it is right now! I have seen a house I love on the same street as a friend and it seems it will certainly go for quite a bit above asking price. I was reading around on how to make an attractive offer - I am a first time buyer with a flexible moving out date from where I’m renting so I can highlight this but I’d also read of people including their AIP and proof of deposit in their offer? I could include both (8-9% deposit) but not sure if this would be wise or make any difference! I’ve only just started getting quotes back from solicitors, so perhaps this is something they would advise on? Thanks for any advice 

MaryNB

Often an EA will ask you to provide an AIP and proof of deposit before the seller will accept your offer to ensure you are proceedable. With a 8-9% deposit I wouldn't be volunteering that information unless the EA asks. It puts you in the riskier category of buyers - those who need a 95% LTV mortgage and are scuppered if the house is downvalued. With such a low deposit it would be unwise to offer over asking in case the bank downvalues it. 
Can you get your deposit up to 10%? Makes you a slightly more attractive buyer and will help a lot with rates as well. Might not go a huge way though with regards to potential downvaluations.

Solicitor won't advise on EA tactics. Although if you have a solicitor selected you can tell the EA you have a solicitor lined up and are ready to go. Just tell the solicitor not to do any chargeable work and not to request searches until the chain is complete so you don't spend money before the seller as found somewhere to buy. 

lookstraightahead

Hi op. Often houses that go for "over asking" are down valued at mortgage stage, and you haven't got a huge deposit and would need to make up the shortfall. So don't just offer anything to get the house.

Your huge plus is that you are at the bottom of the chain and ready to move. To the savvy seller, this is worth a lot as chains often break down when there are weak links. Show that you are seriously

Use your potential to look at houses that have been in the market a while, or maybe have fallen through.

Good luck,

TripleH

Yes, per Ratinacage. If the estate agent thinks you have an 8-9% deposit they may factorvin that that can be reduced to 5% by upping the amount you will pay.

Remember you should only pay what a house is worth to you. If you can afford to pay £130,000 to buy any house, but see one you feel is worth £110,000, then you should only feel obliged to pay about £110,000 for it.

We nearly lost our first home because the bank decided the money we had saved to fix the problems with it, was better spent paying a larger deposit (in their opinion).

grumiofoundation

RatInACage said:

I would only provide proof of funds if my offer was accepted. Otherwise you're removing your own bargaining power by telling them exactly how much you have.

If estate agents want to see proof of funds and/or AIP before they will let you view then you don't really have an option. 

Just because they know you can pay more doesn't mean they can make you do so.

MaryNB

grumiofoundation said:

RatInACage said:

I would only provide proof of funds if my offer was accepted. Otherwise you're removing your own bargaining power by telling them exactly how much you have.

If estate agents want to see proof of funds and/or AIP before they will let you view then you don't really have an option. 

Just because they know you can pay more doesn't mean they can make you do so.

I agree. My seller's EA could see I could afford a good bit more but when I gave a second offer (first one was rejected) I told them it was my best and final and I wasn't going any higher. I had decided beforehand how high I would be willing to go and was determined not to pay anymore. I had set aside money for repairs and furniture so what they could see in my account wasn't what I had to spend on the property purchase.

There's a difference between what you can afford and what you're willing to pay.