FTB Overasking Offers Rejected

CardiffCrank

I've seen quite a few people posting recently that they got valuations in line with asking. We went 7% over asking but the valuation still came in on our side. I think the banks have caught up with the market but it might take a while for the asking prices to catch up.

nicknameless

[Deleted User] said:

Putting in offers over asking just means that you will have a problem when the bank values it below your offer.

You can't win against cash and buy to let/big deposits.

But this just isn't always the case.  I am sure some properties are marked lower as offer overs to increase the feeding frenzy.  We had an offer £25k over asking (7.5%) accepted last Nov and the bank didn't bat an eyelid with the valuation.  Admittedly we were putting in 15% deposit.  We had valued the property against recent sold prices around our offer.  Some marked as offers over, or some asking prices, on the other hand are obviously taking the mickey.  The asking does not always equate to what a lender would value at.  That is clearly too simplistic.

[Deleted User]

nicknameless said:

[Deleted User] said:

Putting in offers over asking just means that you will have a problem when the bank values it below your offer.

You can't win against cash and buy to let/big deposits.

But this just isn't always the case.  I am sure some properties are marked lower as offer overs to increase the feeding frenzy.  We had an offer £25k over asking (7.5%) accepted last Nov and the bank didn't bat an eyelid with the valuation.  Admittedly we were putting in 15% deposit.  We had valued the property against recent sold prices around our offer.  Some marked as offers over, or some asking prices, on the other hand are obviously taking the mickey.  The asking does not always equate to what a lender would value at.  That is clearly too simplistic.

Problem is that house prices are rising really fast. Banks aren't keeping up with it.

nicknameless

[Deleted User] said:

nicknameless said:

[Deleted User] said:

Putting in offers over asking just means that you will have a problem when the bank values it below your offer.

You can't win against cash and buy to let/big deposits.

But this just isn't always the case.  I am sure some properties are marked lower as offer overs to increase the feeding frenzy.  We had an offer £25k over asking (7.5%) accepted last Nov and the bank didn't bat an eyelid with the valuation.  Admittedly we were putting in 15% deposit.  We had valued the property against recent sold prices around our offer.  Some marked as offers over, or some asking prices, on the other hand are obviously taking the mickey.  The asking does not always equate to what a lender would value at.  That is clearly too simplistic.

Problem is that house prices are rising really fast. Banks aren't keeping up with it.

Can you show some evidence of the % of lender valuations lower than offers?  Recently this was raised on the mortgages board and one of the brokers claimed it was a small proportion and being overhyped.  Not saying it doesn't happen and reasonably regularly.  I was pointing out that offers over asking are not going to automatically get down valued which your post implied.

Thrugelmir

[Deleted User] said:

nicknameless said:

[Deleted User] said:

Putting in offers over asking just means that you will have a problem when the bank values it below your offer.

You can't win against cash and buy to let/big deposits.

But this just isn't always the case.  I am sure some properties are marked lower as offer overs to increase the feeding frenzy.  We had an offer £25k over asking (7.5%) accepted last Nov and the bank didn't bat an eyelid with the valuation.  Admittedly we were putting in 15% deposit.  We had valued the property against recent sold prices around our offer.  Some marked as offers over, or some asking prices, on the other hand are obviously taking the mickey.  The asking does not always equate to what a lender would value at.  That is clearly too simplistic.

Problem is that house prices are rising really fast. Banks aren't keeping up with it.

That why banks subcontract out valuations to 3rd party surveyors. Surveyors know the local market.  Easy enough to ring round a few other agents and ask what they've recently sold and at what price. Social media likes to create "stories" when the reality is actually very mundane and matter of fact. 

alibean121

Obviously only one case but I had an offer accepted at £16k over asking and I was very worried about the valuation. I had a 15% deposit so did have some room to move and take a 90% mortgage instead if it came in under but my valuation came in fine for the offer price. Prices around me are just moving up very rapidly

[Deleted User]

Thrugelmir said:

[Deleted User] said:

nicknameless said:

[Deleted User] said:

Putting in offers over asking just means that you will have a problem when the bank values it below your offer.

You can't win against cash and buy to let/big deposits.

But this just isn't always the case.  I am sure some properties are marked lower as offer overs to increase the feeding frenzy.  We had an offer £25k over asking (7.5%) accepted last Nov and the bank didn't bat an eyelid with the valuation.  Admittedly we were putting in 15% deposit.  We had valued the property against recent sold prices around our offer.  Some marked as offers over, or some asking prices, on the other hand are obviously taking the mickey.  The asking does not always equate to what a lender would value at.  That is clearly too simplistic.

Problem is that house prices are rising really fast. Banks aren't keeping up with it.

That why banks subcontract out valuations to 3rd party surveyors. Surveyors know the local market.  Easy enough to ring round a few other agents and ask what they've recently sold and at what price. Social media likes to create "stories" when the reality is actually very mundane and matter of fact. 

No you are missing the point.

That house might be with the silly money offered for it right now, but in a year it two when the buyer defaults and it has to be auctioned... Banks aren't willing to risk that the bubble doesn't pop.

We are headed into recession and brexit is getting worse.

Spiderroo

Depending on the seller, writing a covering letter can help. We did this for 3 of the 4 houses we offered on, we didn’t do it for the one being sold by an investor because it seemed pointless. It’s v competitive in our city and there’s lots of cash buyers so we had no other way to stand out! 

It paid off in the end - the owner of the house we’re buying chose a cash buyer because he wants a quick sale but when they vanished he chose us next even though we didn’t have the second highest offer. We went round today to measure up the bathroom and he told us the letter had swung it for him. He’s an older man and he’s lived there for 40+ years, he’s got lots of happy memories so he wants the house to be loved and lived in by another couple starting a family. 

lookstraightahead

It really depends where the money is going to come from if and when the bank value the property at less than what someone has said they will pay for it. 

lots of buyers are offering over what the banks are willing to lend. 

simon_or

nicknameless said:

[Deleted User] said:

nicknameless said:

[Deleted User] said:

Putting in offers over asking just means that you will have a problem when the bank values it below your offer.

You can't win against cash and buy to let/big deposits.

But this just isn't always the case.  I am sure some properties are marked lower as offer overs to increase the feeding frenzy.  We had an offer £25k over asking (7.5%) accepted last Nov and the bank didn't bat an eyelid with the valuation.  Admittedly we were putting in 15% deposit.  We had valued the property against recent sold prices around our offer.  Some marked as offers over, or some asking prices, on the other hand are obviously taking the mickey.  The asking does not always equate to what a lender would value at.  That is clearly too simplistic.

Problem is that house prices are rising really fast. Banks aren't keeping up with it.

Can you show some evidence of the % of lender valuations lower than offers?  Recently this was raised on the mortgages board and one of the brokers claimed it was a small proportion and being overhyped.  Not saying it doesn't happen and reasonably regularly.  I was pointing out that offers over asking are not going to automatically get down valued which your post implied.

This. I was trying to find that post as well. Banks don't set house prices, the market does. There might be a lag but they will catch up.

And the tens of banks that lend to buyers don't all value properties in the same way. Otherwise buyers wouldn't be able to get a different result by going to a different bank.