Advice on making an offer

BMTH

Here we go again...

Fell in love with a house yesterday which we’ll be making an offer on tomorrow. The EA managed to get us and one other couple in before it’s even gone live online. The other couple already have had a second viewing.

Now how do we approach this? Asking price is 230k but after doing market research and how much we like it we are willing to go up to 240k.

We expect the other couple to make an offer too so do we just go in with asking and inevitably wait for ‘best and final’ or go in with 233k as a start? Higher?

gwynlas

Forget loving it and EA bumf about seeing it before it went on the market, you and another couple saw it so it is on the market. Initially do not go in over asking price as this sets a precedent, is it worth more than £230k the EA did not think so or they would have priced it accordingly? Request a second viewing and take somebody else along to give you a non biased opinion.  Make your initial offer at asking price and raise in increments of £2500 slowly because the EA loves two buyers scrambling over a house and do not forget everything is subject to survey, If you do not get it it was not for you and anothher will come up.

MobileSaver

gwynlas said:

Forget loving it and EA bumf about seeing it before it went on the market, you and another couple saw it so it is on the market. Initially do not go in over asking price as this sets a precedent, is it worth more than £230k the EA did not think so or they would have priced it accordingly? Request a second viewing and take somebody else along to give you a non biased opinion.  Make your initial offer at asking price and raise in increments of £2500 slowly because the EA loves two buyers scrambling over a house and do not forget everything is subject to survey, If you do not get it it was not for you and anothher will come up.

I totally disagree with @gwynlas!

The OP has fallen in love so it obviously ticks most if not all of their boxes and another couple have already arranged a second viewing so it sounds like this is a desirable house that appears to be reasonably priced.

So you have two very interested parties before the house has even appeared on Rightmove; offering under asking will indicate to the seller that you're not serious and may raise concerns that even if you subsequently increase your offer you'll just try and lower it again as exchange approaches.

I think in this case I'd go in at £240k being completely honest that you love the place but that that is the absolute maximum you can afford - the idea being to try and get your offer accepted and the house taken off the market before Rightmove brings even more competing buyers into the mix. At the end of the day, what's an extra £7k or so spread over a typical 25 year mortgage, less than £40 a month being the difference between getting your dream home or not?

I do agree with gwynlas that if the house goes for more then it was not for you but c'est la vie. In the current climate though I'm not sure how quickly or realistic anything as good might come along.

mi-key

It may come down to who is in the best position to buy so to be honest if you think it is worth £240K then go with that and see what happens. The other couple may be very keen, but their budget may onlybe £230K in which case even if they are in a better position to  buy, the seller may favour you.

Of course they may be able to spend £250K and love it as well, in which case it wasnt meant to be

Martico

Include a couple of personal touches in your offer - how nice they've made the house, how you can see yourselves living there because of X, Y, Z. As well as details about how quickly you're able to proceed

youth_leader

I was the first viewer of  this bungalow on a Saturday morning in October 2020, and offered asking immediately after the viewing.

The EA said the seller wanted to 'honour' the three other viewings over the weekend and I would be contacted on the Monday.  The EA called me on the Monday afternoon and said all three viewers had offered, one under, two full asking.  The person that had offered under had phoned that morning to increase their offer to full asking.

She then went on to say the vendor had chosen me out of the offers  (I had cash from my sale in the bank) - if I'd offer more.  As it was during the stamp duty holiday I was able to offer the extra of that amount, and it was accepted.

I did have a survey, but as he wasn't able to lift carpets/move furniture, the fact that every floor except the concrete one in the kitchen was rotten was missed.  I didn't ask the vendor if she'd work done to the floors and as it's a 1930's property, had secretly hoped the ugly grey carpets were hiding parquet floors.  Unfortunately not,  they were hiding wet rot/dry rot/woodworm in one room and the chipboard in the other rooms/hall/bathroom was covered in mould that affected my beautiful late dog. 

 I had to spend every penny of my equity on replacing every floor here last August, do ask lots of questions.  Good luck.

BMTH

MobileSaver said:

gwynlas said:

Forget loving it and EA bumf about seeing it before it went on the market, you and another couple saw it so it is on the market. Initially do not go in over asking price as this sets a precedent, is it worth more than £230k the EA did not think so or they would have priced it accordingly? Request a second viewing and take somebody else along to give you a non biased opinion.  Make your initial offer at asking price and raise in increments of £2500 slowly because the EA loves two buyers scrambling over a house and do not forget everything is subject to survey, If you do not get it it was not for you and anothher will come up.

I totally disagree with @gwynlas!

The OP has fallen in love so it obviously ticks most if not all of their boxes and another couple have already arranged a second viewing so it sounds like this is a desirable house that appears to be reasonably priced.

So you have two very interested parties before the house has even appeared on Rightmove; offering under asking will indicate to the seller that you're not serious and may raise concerns that even if you subsequently increase your offer you'll just try and lower it again as exchange approaches.

I think in this case I'd go in at £240k being completely honest that you love the place but that that is the absolute maximum you can afford - the idea being to try and get your offer accepted and the house taken off the market before Rightmove brings even more competing buyers into the mix. At the end of the day, what's an extra £7k or so spread over a typical 25 year mortgage, less than £40 a month being the difference between getting your dream home or not?

I do agree with gwynlas that if the house goes for more then it was not for you but c'est la vie. In the current climate though I'm not sure how quickly or realistic anything as good might come along.

I am happy to go straight in at 240k but it's my other half I need to convince. She's just as new to this as me but she's extremeley conservative with this kind of thing. What I'm expecting her to question

'Going straight in at 240k could mean we've over valued the house and a lender may expect us to find the extra money or lose value on it in years to come if we come to sell it'.

'I worry about the other party doesn't go above 230k or doesn't offer at all meaning we could have got it for £230-235k.'

In the next breath she's telling me she loves it and doesn't want to lose it aha

 I do think it's due to go on Rightmove tomorrow!

comeandgo

If the offers are over the asking price then I’d not even look at first time buyers as usually they don’t have the money to bridge the gap.  If you do have this money and you are not relying on the mortgage company to value at higher end then I’d tell the EA this.

mi-key

I am happy to go straight in at 240k but it's my other half I need to convince. She's just as new to this as me but she's extremeley conservative with this kind of thing. What I'm expecting her to question

'Going straight in at 240k could mean we've over valued the house and a lender may expect us to find the extra money or lose value on it in years to come if we come to sell it'.

'I worry about the other party doesn't go above 230k or doesn't offer at all meaning we could have got it for £230-235k.'

In the next breath she's telling me she loves it and doesn't want to lose it aha

 I do think it's due to go on Rightmove tomorrow!

Never worry about what you could have bought a house for if you'd offered less. You could have offered £5K less and had it rejected and in the meantime someone else buys it. Then the next suitable house you find is £20K more than the first one, so you have actually had to pay more. 

If you are planning to stay in the house for more than 5 years it is very very unlikely you will lose any money if you decided to sell. 

The only issue is if you are stretching yourself to your maximum and the lender does undervalue it, then you would have to be able to come up with the difference, and a seller make take this into account if they have better buyers interested

MobileSaver

BMTH said:

MobileSaver said:

I think in this case I'd go in at £240k being completely honest that you love the place but that that is the absolute maximum you can afford - the idea being to try and get your offer accepted and the house taken off the market before Rightmove brings even more competing buyers into the mix. At the end of the day, what's an extra £7k or so spread over a typical 25 year mortgage, less than £40 a month being the difference between getting your dream home or not?

'Going straight in at 240k could mean we've over valued the house and a lender may expect us to find the extra money or lose value on it in years to come if we come to sell it'.

'I worry about the other party doesn't go above 230k or doesn't offer at all meaning we could have got it for £230-235k.'

Sadly, of course, no-one here can answer those quandaries for you. The only certainty is that if it is as good as you and the other couple think then there's bound to be more interested parties once it appears on Rightmove.

Maybe your other half is right, the other couple ends up not making an offer and no-one on Rightmove does either in which case you pick it up for £230k. Conversely someone else could make a knock-out offer of £240k and you're left drowning your sorrows as to what could have been. For me it's a no-brainer for the sums involved but that's easy for me to say when it's someone else's money being talking about.

Most people these days choose at least a 5 year fixed-rate mortgage and, even if you pay more than your lender's valuation, the chances of it being worth less in five years time is incredibly slim.

lika_86

Personally I'd be putting in an offer now (why wait until tomorrow? Email the agent and set out your position) at asking price on the basis it comes off the market. If the other couple have arranged a second viewing then there's some doubt there from the sellers' perspective. An at asking offer after one viewing suggests you're serious and not playing games.