What happens of bidding is over the real value?

comeandgo

lookstraightahead said:

comeandgo said:

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

You make the difference up out of your savings, there is never a guarantee a property will be valued for mortgage purpose at the rate you offered on, which is one of the reasons I never entertain first time buyers as they are usually the ones with no back up savings.

So what you're saying is that you want a gullible buyer. Aren't you limiting your chances somewhat? 

Most people with a lot of equity won't want to waste it (depending on market)

no, all our properties bought and sold, except when buying new, have been over asking price.  If I want a home it’s somewhere I want to buy as a home, not a future investment.

Sarah1Mitty2

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

The lender won`t lend the too high bid, but they will lend what they think it is worth, you just need to politely tell the seller that you have to reduce your offer. 

Richiem1987

It's advisable to have a deposit available of around 20%. This give you the wiggle room if the bank value it lower than the offer. Lets say the Asking Price was £200k. A bidding war ensures and the final offer is £220. You have available funds of 40k.(which is just under 20%). The Bank then value the property at £200k and will lend you £180k. You then pay 20k for the now 10% deposit, then the other 20k to cover the shortfall. 

Sarah1Mitty2

comeandgo said:

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

You make the difference up out of your savings, there is never a guarantee a property will be valued for mortgage purpose at the rate you offered on, which is one of the reasons I never entertain first time buyers as they are usually the ones with no back up savings.

With the cost of living crisis getting worse people are unlikely to dip into savings to pay over the valuation for a house, relative of mine trying to sell just keeps hearing that the monthly payments don`t  really work any more at the price they want.

comeandgo

Sarah1Mitty2 said:

comeandgo said:

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

You make the difference up out of your savings, there is never a guarantee a property will be valued for mortgage purpose at the rate you offered on, which is one of the reasons I never entertain first time buyers as they are usually the ones with no back up savings.

With the cost of living crisis getting worse people are unlikely to dip into savings to pay over the valuation for a house, relative of mine trying to sell just keeps hearing that the monthly payments don`t  really work any more at the price they want.

I think that would be the case for the first time buyers but if you are selling your own house for over the valuation then that money usually just goes into the next house you purchase so you are not dipping into your savings.

Sarah1Mitty2

comeandgo said:

Sarah1Mitty2 said:

comeandgo said:

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

You make the difference up out of your savings, there is never a guarantee a property will be valued for mortgage purpose at the rate you offered on, which is one of the reasons I never entertain first time buyers as they are usually the ones with no back up savings.

With the cost of living crisis getting worse people are unlikely to dip into savings to pay over the valuation for a house, relative of mine trying to sell just keeps hearing that the monthly payments don`t  really work any more at the price they want.

I think that would be the case for the first time buyers but if you are selling your own house for over the valuation then that money usually just goes into the next house you purchase so you are not dipping into your savings.

But if it is over the valuation someone has to dip into their savings, and there are FTB in many chains?

lookstraightahead

comeandgo said:

Sarah1Mitty2 said:

comeandgo said:

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

You make the difference up out of your savings, there is never a guarantee a property will be valued for mortgage purpose at the rate you offered on, which is one of the reasons I never entertain first time buyers as they are usually the ones with no back up savings.

With the cost of living crisis getting worse people are unlikely to dip into savings to pay over the valuation for a house, relative of mine trying to sell just keeps hearing that the monthly payments don`t  really work any more at the price they want.

I think that would be the case for the first time buyers but if you are selling your own house for over the valuation then that money usually just goes into the next house you purchase so you are not dipping into your savings.

Who starts the chain then? Because I break a chain so that I am first but not a FTB - but I certainly won't pay over to fund others up the chain. No wonder I don't do it 😂 I suppose it's just less savvy people with money to chuck away.

Ramouth

lookstraightahead said:

comeandgo said:

Sarah1Mitty2 said:

comeandgo said:

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

You make the difference up out of your savings, there is never a guarantee a property will be valued for mortgage purpose at the rate you offered on, which is one of the reasons I never entertain first time buyers as they are usually the ones with no back up savings.

With the cost of living crisis getting worse people are unlikely to dip into savings to pay over the valuation for a house, relative of mine trying to sell just keeps hearing that the monthly payments don`t  really work any more at the price they want.

I think that would be the case for the first time buyers but if you are selling your own house for over the valuation then that money usually just goes into the next house you purchase so you are not dipping into your savings.

Who starts the chain then? Because I break a chain so that I am first but not a FTB - but I certainly won't pay over to fund others up the chain. No wonder I don't do it 😂 I suppose it's just less savvy people with money to chuck away.

You and I are often at opposite side of this question!  People like me overpay using equity built up in our previous property.  We knew exactly where we wanted to live and were willing to overpay rather than rent for several years waiting for something without competition.  

It hasn’t proven to be a financially bad decision.  We overpaid by a rather painful 10% but prices have continued to rise (by over 17%) in since and only a couple of other houses have come up that would have been suitable.

comeandgo

lookstraightahead said:

comeandgo said:

Sarah1Mitty2 said:

comeandgo said:

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

You make the difference up out of your savings, there is never a guarantee a property will be valued for mortgage purpose at the rate you offered on, which is one of the reasons I never entertain first time buyers as they are usually the ones with no back up savings.

With the cost of living crisis getting worse people are unlikely to dip into savings to pay over the valuation for a house, relative of mine trying to sell just keeps hearing that the monthly payments don`t  really work any more at the price they want.

I think that would be the case for the first time buyers but if you are selling your own house for over the valuation then that money usually just goes into the next house you purchase so you are not dipping into your savings.

Who starts the chain then? Because I break a chain so that I am first but not a FTB - but I certainly won't pay over to fund others up the chain. No wonder I don't do it 😂 I suppose it's just less savvy people with money to chuck away.

I think the difference is I’ve never been in a chain, never sold to first time buyers after seeing how ignorant some were and would never buy a house just because the price fitted .  I buy a property to live in and be comfortable and happy, not because I perceive i got a good deal.  

lookstraightahead

comeandgo said:

lookstraightahead said:

comeandgo said:

Sarah1Mitty2 said:

comeandgo said:

fitzykev said:

What happens if bidders bid a few thousand over the actual value? I have been told the lender might not lend the money. If bidders are going two high should estate agents inform bidders its close to value? 

You make the difference up out of your savings, there is never a guarantee a property will be valued for mortgage purpose at the rate you offered on, which is one of the reasons I never entertain first time buyers as they are usually the ones with no back up savings.

With the cost of living crisis getting worse people are unlikely to dip into savings to pay over the valuation for a house, relative of mine trying to sell just keeps hearing that the monthly payments don`t  really work any more at the price they want.

I think that would be the case for the first time buyers but if you are selling your own house for over the valuation then that money usually just goes into the next house you purchase so you are not dipping into your savings.

Who starts the chain then? Because I break a chain so that I am first but not a FTB - but I certainly won't pay over to fund others up the chain. No wonder I don't do it 😂 I suppose it's just less savvy people with money to chuck away.

I think the difference is I’ve never been in a chain, never sold to first time buyers after seeing how ignorant some were and would never buy a house just because the price fitted .  I buy a property to live in and be comfortable and happy, not because I perceive i got a good deal. 

But you are getting a good deal when you sell, so theoretically you're doing the same thing. It's a clever approach. It's just that your buyer is paying for it, which is why we will never buy/sell from each other 😄