Decision In Principle - Offer Email

TazUK

Hi All, 

My wife and I are looking to buy our first house after living with parents 10 years. We have built up enough deposit and seen a house for 280k which we are willing to pay up to £285k for. 

The house has been empty for over a year and needs a full renovation, it has no central heating, garden is a mess, windows are old wood etc. We called the estate agent as it was on the market a few weeks back and then it was marked as sold but now it's back on the market. 

He informed us that the deal fell through and the offer the buyer accepted was £300k. We asked if he would take it off the market if we offered the asking price and the buyer said no, he wants to do an open house first this Friday and then leave it up to the highest bidder. The estate agent has also said there have already been a few offers at asking.

For us to make a serious offer we have been told to do it by email showing our Mortgage in Principle certificate however our certificate states that we can borrow up to £330k, will the estate agent let the seller know this and then try and push us for more?

Thank you

RHemmings

They might, but no-one can force you to pay more for the property than you want to. Provided that you're prepared to walk away, then even if they try to hold out for more, simply waiting may give you the result you want even if they know you have an offer for a bigger mortgage. Of course, someone may be prepared to pay more than you and they might not come back if you wait. But, that's life. 

UnderOffer

They may try to push, but stand firm at your max offer, then just walk away. I would stick with £285 offer, (as their asking is £280 not the £300 they reportedly accepted). Reiterate you are no chain etc., as that can been seen as a positive. 

Good luck. 

EssexHebridean

The key thing to remember about Estate Agents is that they are working for the seller of the property - not for you. As a buyer, they can be very useful through the process, but absolutely never give them any information that you don't trust them not to use to their advantage! (And in this instance, the advantage would be a chunk extra commission if you buy for £330k rather than £285k!) 

They may well also be fibbing about there being offers at asking...indeed, there is no reason why you couldn't make an offer at a level you are comfortable with along with a declaration of your position - so chain free, ready to move, AIP in place etc. If you were to make an offer now at £285k then the agent has to pass that on - and the seller can then either accept, decline, or possibly sit with it on the table until after the open house etc. 

TazUK

EssexHebridean said:

The key thing to remember about Estate Agents is that they are working for the seller of the property - not for you. As a buyer, they can be very useful through the process, but absolutely never give them any information that you don't trust them not to use to their advantage! (And in this instance, the advantage would be a chunk extra commission if you buy for £330k rather than £285k!) 

They may well also be fibbing about there being offers at asking...indeed, there is no reason why you couldn't make an offer at a level you are comfortable with along with a declaration of your position - so chain free, ready to move, AIP in place etc. If you were to make an offer now at £285k then the agent has to pass that on - and the seller can then either accept, decline, or possibly sit with it on the table until after the open house etc. 

Hi,

So when I make that offer should I send the AIP which shows the £330k or should I go back to the bank and get another AIP which shows £285k 

Thanks

EssexHebridean

I personally wouldn't send it at all in the first instance - I'd make a straight declaration that I HAVE the offer in principle that allows me to make that offer. Getting a further offer that says the amount you want (and remember to take account of what you are planning on putting in as a deposit, as well!) might not be a bad idea in case they do push the point of wanting you to send something though. 

NameUnavailable

OTOH showing an AIP that says you're good for £330K shows that you can afford the property (and you need headroom for funds to do the work).

It isn't going to make any difference IMHO if you just state your offer and show the AIP - they will either accept your offer or not.

Ady87

I understand wanting evidence that they aren’t being messed around by tyre kickers which probably happens a lot but I’d be almost certain they use that information to the advantage of themselves and the seller and I’d be uncomfortable sharing it in writing.

Bigphil1474

OP, you should be able to get an AiP in around 15 minutes, so for me I'd just do another one showing what you want it to show. I did one with Barclays which said that I could borrow the amount I wanted to borrow, but also did one with HSBC which showed how much they'd be willing to lend not what I'd asked about borrowing.

Personally, it wouldn't bother me what the EA thought or said. The bank won't lend you more than the house is worth anyway.