Noone likes my 5% Deposit

spotty_dog343

I've been house hunting for 2 months and putting offers out there. But it seems no one likes my 5% deposit. (95% LTV)

I nearly had a 3-bed terraced house, I bid 7k over asking (a 2-bed terraced house nearby was on for more money than the offer). The vendor didn't choose me because she was worried about my 5% deposit, wanted her money, and didn't know if I could make the difference if the bank under-valued it. 

But my question is, why does she ask for OIEO if she doesn't think the bank will value it the same?

The buyers fell through and a week later the EA came back and asked if I was still interested in the house. I asked what the accepted offer was and the EA just said they were all in the same region. Another week later and I see the house has been relisted, so she's not interested in me buying it or even negotiating the offer.

macman

I'm not clear. Are you a cash buyer? If so, why only a 5% deposit?
The normal amount on exchange is a 10% deposit.

spotty_dog343

95% LTV using a 5% deposit. Only using 5% because that's how much I've saved so far, and I'd quite like to own a house ASAP. 

Some banks are doing 95% mortgages, till they are up for review in December 2023. 

lr1277

Another possibility is that the seller was going to use your deposit plus some money from themselves to,pay the deposit on their next purchase. If you offer 5%, perhaps it is too much for them to make up, especially if they have already had an offer accepted and promised a 10% deposit.

housebuyer143

I imagine if you didn't offer after the agent called you and a week went by they probably thought you were not interested and that's why they put it back up. 
Did you put another offer in at that point? How did you leave it? 

Obviously 95% won't be as desirable as cash buyers, those with large deposits etc. Just one of those things where there are multiple people going for them. 

hazyjo

I would consider 5% risky. If it's an offers over market where you are, the chances are, your lender will value at the original price, meaning you'll have to find the difference in cash (or they'll have to reduce their sale price).

Lenders also may withdraw 5% mortgages when you get halfway through the process.

Doubt it's to do with the 10% at exchange as it's pretty common to negotiate less to exchange with, and it's often not really thought about until later on.

spotty_dog343

housebuyer143 said:

I imagine if you didn't offer after the agent called you and a week went by they probably thought you were not interested and that's why they put it back up. 
Did you put another offer in at that point? How did you leave it? 

Obviously 95% won't be as desirable as cash buyers, those with large deposits etc. Just one of those things where there are multiple people going for them. 

 Oh, believe me, I was in contact with the EA all week! And they knew how interested I was in the property. They said they would contact me by the end of the week with an update, and they never did. Previously the vendor has taken a week to go through offers, so I thought it was going to be another week-long decision. 

sheramber

But my question is, why does she ask for OIEO if she doesn't think the bank will value it the same?

Because somebody will pay over the value if they want the house enough.

But they will have to make up the difference between what the lender will lend and the offer.

Where I am house generally sell for 15-20% over the home report value- which is the value the surveyor has put on the house.

housebuyer143

spotty_dog343 said:

housebuyer143 said:

I imagine if you didn't offer after the agent called you and a week went by they probably thought you were not interested and that's why they put it back up. 
Did you put another offer in at that point? How did you leave it? 

Obviously 95% won't be as desirable as cash buyers, those with large deposits etc. Just one of those things where there are multiple people going for them. 

 Oh, believe me, I was in contact with the EA all week! And they knew how interested I was in the property. They said they would contact me by the end of the week with an update, and they never did. Previously the vendor has taken a week to go through offers, so I thought it was going to be another week-long decision. 

Well that's just bad form 😔😔 especially coming back to you getting your hopes up. 

Spiderroo

spotty_dog343 said:

I've been house hunting for 2 months and putting offers out there. But it seems no one likes my 5% deposit. (95% LTV)

I nearly had a 3-bed terraced house, I bid 7k over asking (a 2-bed terraced house nearby was on for more money than the offer). The vendor didn't choose me because she was worried about my 5% deposit, wanted her money, and didn't know if I could make the difference if the bank under-valued it. 

But my question is, why does she ask for OIEO if she doesn't think the bank will value it the same?

The buyers fell through and a week later the EA came back and asked if I was still interested in the house. I asked what the accepted offer was and the EA just said they were all in the same region. Another week later and I see the house has been relisted, so she's not interested in me buying it or even negotiating the offer.

There’s quite a few cash buyers who will pay over asking. We viewed a house on for OIEO £280k and offered £310k, it went to a cash buyer for £330k. The last house on the road sold for about £280k late last year so it’s a big jump. 

Even if theIR survey turns up issues the seller will get more than they put the house on for but that’s more than the bank would lend so they needed a cash buyer. I know because we’re buying the house two doors down now and it’s had a desktop valuation of £280k! Our house needs more work than the £330k one but the difference in finish wasn’t significant enough the bank would value ours at £330k after work, unless overall prices on the road increase…

Soot2006

spotty_dog343 said:

housebuyer143 said:

I imagine if you didn't offer after the agent called you and a week went by they probably thought you were not interested and that's why they put it back up. 
Did you put another offer in at that point? How did you leave it? 

Obviously 95% won't be as desirable as cash buyers, those with large deposits etc. Just one of those things where there are multiple people going for them. 

 Oh, believe me, I was in contact with the EA all week! And they knew how interested I was in the property. They said they would contact me by the end of the week with an update, and they never did. Previously the vendor has taken a week to go through offers, so I thought it was going to be another week-long decision. 

Could be worth following up again, even if it's to build the relationships with the EA. The EA works for the seller, sure, but they want to sell houses, so they can be an asset for a keen buyer as well.  The house I am in now I got because the EA called me as soon as his vendor signed his contract. The first words were "I've found you your house". He was right. A good EA will make you feel like they're working for you, too, even though their job is to get your last penny from you haha.