Have we accepted the right offer?

Help1234

We had 5 estate agents round, 2 suggested we listed for £195,000. Three suggested we list for offers over £200,000, with two of them suggesting we could hope to achieve £205,000. As well as price, our priority is moving asap for a new job early next year.

We listed for offers over £200,000 and it was an absolute frenzy. We had in excess of 30 people trying to view, with offers coming in the day of listing. After three days we had about 10 offers ranging from £190,000 to £220,000. We had people crying and people turning up to the house to beg us. 

We had first-time buyers really keen for it and asking what it would take to get it off the market and we were initially going to sell to them for £212,500. They were in a strong position wanting to move fast, had proof of mortgage, proof of 15% deposit and solicitors already instructed (due to being guzumped on a previous house).

Then a cash buyer (someone who has sold his house and now living with his children whilst waiting to find a new home) offered £215,000. A first-time buyer then offered £217.000 and the original first-time buyer we were going to accept upped theirs to £220,000. Our estate agent spoke to all of them and advised us to go with the cash buyer for £215,000. We have accepted this as we were worried about the bank devaluing, with this bidding war possibly driving the price up above its value. Did we do the right thing? Feel so guilty for these first-time buyers who were crying. How often do banks devalue?

AdrianC

There are regular threads here from people whose lenders have downvalued. Data is not the plural of anecdote, of course, but it appears to be happening far more regularly than it used to - and if you're looking at an offer 10% above the EA's suggested marketing figure, I'd suggest it was likely in your case.

A downvaluation doesn't necessarily mean the buyer can't buy, of course... If they have enough equity that they can still purchase with the lender's LtV calculated against the valuation rather than the offer. FTBs, of course, are fickle creatures at the best of times, and even if they can afford they may get cold feet.

I think you've taken the right offer, based on your description. A theoretical extra £5k can quickly turn into a nightmare.

Help1234

Thank you that’s really helpful :-)

74jax

I would have gone with 220k but everyone's situation is different. You just have to trust your estate agent.

However once they had 30 people trying to view, I'd have asked them to do block viewings and best and final.  But again, not everyone likes that and you have to go with what you ultimately decided on.

The moment people started turning up unannounced and crying would have been the time I'd have had serious words with the agents. You are paying them to sell your house, not to sit back whilst you answer to emotional hopefuls. 

I am however very hardened to buying /selling and don't mean in anyway to belittle the emotional attachment people have. 

Help1234

I know it’s so tricky we were just concerned because the most a house on this street went for was £216,000 which has an extension turned into an extra bedroom. That was December 2019. Ours is only a 2 bed.

AdrianC

Help1234 said:

I know it’s so tricky we were just concerned because the most a house on this street went for was £216,000 which has an extension turned into an extra bedroom. That was December 2019. Ours is only a 2 bed.

And if you look wider than "this street"?

If there's something about that one street that affects prices, then you can of course adjust accordingly.

Belleofthebooks

Right decision IMO.
First time buyers are unpredictable and a cash buyer is hard to turn down. 

Thrugelmir

If two of the EA's are guiding towards £205k. Then don't be surprised if those offering well above requiring mortgages get knocked backed. Not a question of downvaluing. More a question of people making silly bids in an attempt to be the top dog. If you've a genuine cash buyer then you've done well. 

Marvel1

The ones crying sound too emotional and over the top for a business transaction.  I would expect more water works as the process goes on.

NameUnavailable

I'm always wary of 'cash' buyers. So many people say that then you find out that they're still applying for a mortgage.

I'd ask your agent if they have checked (asked for proof of funds etc.). Even then this buyer might decide to keep £££ in the bank and mortgage some of the purchase price.

But at the same time a FTB is a risk especially when they get the survey report back!

RS2OOO

We were in identical situation and accepted higher offer from first time buyers with similar credentials to yours.

After accepting offer they kept coming back for more viewings (and you well know all the tidying and cleaning that goes hand in hand with that), then they went through periods of getting cold feet, then back begging that the house is completely removed from advertising (even though SSTC), then coming back for more viewings and asking relatively daft/cliche questions. They had the estate agents completely fooled as solid reliable buyers though I wasn't convinced.

8 weeks into the process they simply changed their mind and pulled out.

After a period of accepting more unreliable offers and going through more viewings and stress, we've ended up accepting less from that original cash buyer/investor who fortunately still wanted the house.

Based on my experience you can see which offer I'd recommend you accept.

However, accept the offer on condition of no further price negotiations up or down... Cash buyers may lower offer on the morning of exchange thinking they've got you by the short and curlies, and they have very less to lose if you say no.