"Offers Over" selling etiquette

Sine_Nomine

I'm currently selling a freehold house and the agent advised a strategy of listing it as "offers over" a base price.  This seemed like a good strategy as it was difficult to estimate its value.  After 14 viewings over 6 days I currently have 5 offers:

100% of base price
103% of base price
104% of base price
105% of base price
107% of base price

On this basis I am minded to think our base price might have been a touch low.

The agent is now saying I should go to all those who offered and ask them for a "final and best offer within 24 hours", and then choose.  I am of the view that one should go to all of those who offered and tell them what the current highest offer is, and ask if they want to improve their offer.  The agent is telling me that it is not "fair" to disclose to any of those who have offered what the current highest offer is, which I am puzzled by.  I'm also in no particular hurry and worry that making a decision when the house has been listed less than a week is a little rushed. 

In effect the agent is running the bidding as a 'silent auction'.

We recently sold my FiL's former house, and used a conventional approach of listing at an asking price a little over what we wanted, we then had offers just under the asking price, and basically played these off simply telling each one what the highest bid to beat was, and thus receiving increasing offers until that process was exhausted, and we then accepted the highest offer. 

I am puzzled by my agent's assertion that it is not right to disclose what the highest offer is.  That is surely in our best interest, and also arguably of the potential buyers?

So my question is, is the agent correct in saying we cannot disclose the value of the current highest offer to the front runners?  And is there some significant distinction between "£XXX,000 o.n.o" and "offers in excess of £XXX,000" that I am not aware of?

Grateful for any thoughts on this.


  

staffie1

In my experience, any notion of an estate agent acting with integrity is deluded. Their strategy will be to screw as much money out of you as possible, and the buyer’s interests will come a poor second to their own. 

ironlady2022

Sine_Nomine said:

I'm currently selling a freehold house and the agent advised a strategy of listing it as "offers over" a base price.  This seemed like a good strategy as it was difficult to estimate its value.  After 14 viewings over 6 days I currently have 5 offers:

100% of base price
103% of base price
104% of base price
105% of base price
107% of base price

On this basis I am minded to think our base price might have been a touch low.

The agent is now saying I should go to all those who offered and ask them for a "final and best offer within 24 hours", and then choose.  I am of the view that one should go to all of those who offered and tell them what the current highest offer is, and ask if they want to improve their offer.  The agent is telling me that it is not "fair" to disclose to any of those who have offered what the current highest offer is, which I am puzzled by.  I'm also in no particular hurry and worry that making a decision when the house has been listed less than a week is a little rushed. 

In effect the agent is running the bidding as a 'silent auction'.

We recently sold my FiL's former house, and used a conventional approach of listing at an asking price a little over what we wanted, we then had offers just under the asking price, and basically played these off simply telling each one what the highest bid to beat was, and thus receiving increasing offers until that process was exhausted, and we then accepted the highest offer. 

I am puzzled by my agent's assertion that it is not right to disclose what the highest offer is.  That is surely in our best interest, and also arguably of the potential buyers?

So my question is, is the agent correct in saying we cannot disclose the value of the current highest offer to the front runners?  And is there some significant distinction between "£XXX,000 o.n.o" and "offers in excess of £XXX,000" that I am not aware of?

Grateful for any thoughts on this.


  

This is what my EA advised. I got 4 offers, then went to best and final without disclosure of biggest bid cos its not fair on the highest bidder at the time.

If it's a mortgage buyer, then the bank survey will value it lower than what you sell it for and the bidder may come back and negotiate with you. 

donutandbeer

From my limited experience, estate agents normally do not disclose how much the highest offer is to buyers. As a buyer we need to try to “get” that information out of estate agents by asking very specifically and they normally answer vaguely. I assume that’s because no buyer wants to be essentially gazump by say £500 if there are other close offers. I certainly do not want other buyers to know how much my offer is, when most offers are all quite close (less than £10k apart).

We are also selling (hoping to complete soon), and we also used the “offers over” listing strategy partly because it was a bit difficult to compare our property to others in the area. BUT the base price we put was a number we would be content with, so basically any offer that is not lower is fine. Most offers we got were higher than the base price, and we ended up going with an over 3% offer from a FTB with enough deposit to cover down-valuation from the bank if that happens. 

If you are not happy with the number, maybe you should change the way you list the property. My opinion is that people should list their property as close to the lowest offer they will accept as possible.

We just made an offer last Monday on a property, they had a guide price, our offer I believe was the highest at 2% over, there were at least one chain-free offer close but lower than us. Estate agent called to give update every weekday last week, on Wednesday she said the vendors “really want” £X which was 10k more than our offer (so basically they want 4% more than guide price, even though they listed it as guide price and not offers over). I refused to up our offer, and they withdrew their property from the market last Friday. I imagine they either realise they couldn’t afford what they wanted to buy with their property right now, or they maybe want to relist it with a different price/strategy after a few weeks. To be honest there wasn’t that many comparable properties in that area, and I kind of think if they listed the property as £X they might have gotten closer offers.

The market has been crazy in south east, anything decent is gone in at most 10 days, so I wouldn’t worry too much about selling in a week but obviously this depends on the area. We accepted an offer on our property after the first weekend of viewings (30+ viewings), first buyer pulled out after a second viewing in the second week (I felt as FTB they panicked), we then had another weekend of viewings and accepted an offer that was actually a bit higher than the first one. We would rather not go with a FTB buyer but unfortunately almost all offers we got were from FTB. We didn’t even go to Best & Final in the second round because they made a good offer and we were happy with that already. It’s not like there were offers that were close to theirs, and when we did Best & Final the first round not everyone increase their offers, the first buyer we chose didn’t.

Sapindus

If it worked like ebay then the highest bidder would at least know they were the high bidder, and the rest would know they were not winning the auction.  I would be inclined to go back to them with that information and ask for best and final bids, that seems "fair".  If you are not in a rush you could give it a second week, but it seems like you have a good number of offers and the EA probably has a hunch bids will not go much higher - it wouldn't be in their interest to stifle interest. 

SavingPennies_2

You asked for offers over and got 4 offers over, so why not just pick the buyer you want to go with? I think playing them off each other, by disclosing the highest bid, is poor form but that's just my opinion.

propertyhunter

You have the right to do what you want to get the highest price, but it wouldn't sit well with me as a buyer who offered the most to have my offer revealed to others. What will end up happening is a bidding war - and actually if you play one off against the other, the buyers will get put off and pull out - fearful of how you will behave later down the line. Will you be underhanded and accept another higher offer in a couple of months after the conveyancing process has started? 

How would you feel if you were one of the potential buyers?

Remember, everything in life is not just about money. Consider the chain that comes with each buyer, their LTV or cash position, etc. 

eddddy

Sine_Nomine said:

So my question is, is the agent correct in saying we cannot disclose the value of the current highest offer to the front runners?  
  

The Property Ombudsman says the EA is allowed to disclose offers if the seller agrees, and the people offering are made aware of that - but then they should disclose all offers to all parties.

The problem with that approach is that it can turn into a long painful auction, with the EA having to continuously phone the 5 buyers... i.e.

• The EA tells all 5 buyers that the highest offer is £x
• So one of them offers £500 higher than £x
• So another buyer goes £500 higher again
• So another one goes another £500
• etc, etc

It's much quicker and easier to give each buyer just one chance to put forward their best offer.

Sine_Nomine said:

And is there some significant distinction between "£XXX,000 o.n.o" and "offers in excess of £XXX,000" that I am not aware of?

Not really.

I've come across EAs who sometimes use "offers over" as a way of 'tricking' sellers into listing at a lower price than they really want to.

For example:

• Seller wants to list property at £265k, EA wants to list property at £250k.
• So EA says, lets list it at "Offers over £250k" to whip up some competition, and hopefully the offers will go over £265k
• Then offers come in at £240k or £245k or £250k or £255k - and the EA tries to get the seller to accept

But I've also seen "offers over" used more legitimately.

UnderOffer

Don’t forget to consider the buyers circumstances too, it’s not always the highest bidder best to go with. You could have a no chain bidder with mortgage/financials all in place who bid £1000 lower but is the most proceedable. 

lookstraightahead

SavingPennies_2 said:

You asked for offers over and got 4 offers over, so why not just pick the buyer you want to go with? I think playing them off each other, by disclosing the highest bid, is poor form but that's just my opinion.

This.

Firstly I never even view offers over as I won't get into this scenario. And I have a very low LTV and could pay way over to make up any 'under' valuation.

Secondly all this thinking could be wasted when the bank down values your house.

thirdly, the longer you think about it the more twitchy your buyers will get. Some might even drag you along to continue with the game.

And finally, the market could change soon and you could lose your pot of buyers (or horses)

Sandtree

lookstraightahead said:
Secondly all this thinking could be wasted when the bank down values your house.

thirdly, the longer you think about it the more twitchy your buyers will get. Some might even drag you along to continue with the game.

And finally, the market could change soon and you could lose your pot of buyers (or horses)

How are any of those different to a traditional asking price approach? 

Any offered price may not be supported by your bank irrespective of if it was an offers over or asking price approach. Twitchy buyers can always cause problems and market can always change. 

The estate agent is proposing a 24 hour auction... if you are concerned of market changes in that sort of timescale you are really not going to survive the length of time it takes from acceptance to exchange!

The last two sales I was involved in were on a traditional asking price approach, in both cases we received offers both below and above the asking price and both went to a blind auction on the recommendation of the estate agent which in one case moderately improved the price and the other considerably so.

Just like any sale ultimately its the sellers decision on which bid to accept... in one of the cases of the above the second highest bidder was chosen despite being £5k less because they were a chain free cash buyer whereas the top bidder had had their property on the market for 18 months and it wasn't currently under offer.