How to avoid a bidding war?

Polkadot87

Me and my partner are first time buyers and found a house a few months ago that we are very interested in. The beneficiaries of the house sale are charities.

The house went on the market a week ago. We viewed it just before it went on and registered our interest. It has been extremely popular with 5 offers so far, all above the asking price, with one almost 10 percent above! There is another full day of viewings taking place this week (so probably more offers) and we have been advised to think about our own offer. It will most likely go to final offers in the next week or so. 

We still really want the house and are prepared to fight for it but want to go the best way about it, trying to avoid a bidding war if possible! We will need a mortgage and have a large deposit (up to almost 30 percent if needed) but don't want to use all of it if we can help it because the house requires extensive renovations. 

Because of our financial position we believe we could make a high offer and still get a mortgage but we are unsure how much to offer and when to make our move.

Because we have registered our interest, do we have to make an offer now or could we wait til best and final to make an offer? We are aware that estate agents can tell other buyers that someone has put in a higher offer!

Any advice would be much appreciated, thank you! 

anselld

There are (allegedly) five offers already so the only way to "avoid a bidding way" is not to enter it.

First things first though, have you ascertained that Probate has been granted?  Otherwise you could be in for a long wait even if you do "win".  The final red flag for me would be multiple charity beneficiaries.  It can end up being a bureacratic nightmare actually getting anything through and getting all their respective Solicitors off the gravy train.

It sounds a nightmare!

Hoenir

Estate Agent may well ask for full and final sealed bids if there's a high level of interest in the property. 

propertyrental

And 'full and final' does not necessarily mean final.

If the F&F deadline is reached, and the highest bid identified, what would the charities do if someone then offered 10% more again?

There is no way to avoid a bidding war if multiple people all want to buy the property. All you can do is decide exactly how much you can afford, and how much you are prepared to spend.

cymruchris

Yes - you might very well have to go to full and final. I did that recently and secured the property as I was in a strong position, which after winning the bid was confirmed, changed drastically as my buyers pulled out when they heard the good news. 

My winning bid was 2.8 percent over asking, coupled with no mortgage and (at the time) being ready to roll.

There were 5 bidders on mine as well. (I did some research, and found the owner was Chinese - and so ended my bid with £xxx888 - something that likely only a Chinese person would pick up on - 888 is a lucky number).

If in the area you're looking there are few properties that come up in the price bracket/specification - then expect competition to be fairly high.

If you didn't get this one - how long (based on your experience of looking so far) would the next one likely come up?

The area I was looking in - only 1 or 2 properties that matched my wishlist and budget came up each month - and each time there was a flurry of viewings and multiple offers, and all were sold quickly.

I resold my own property quite quickly (third time lucky) and am just waiting for searches to come back and an exchange date to be agreed on another property - so although I'm not shouting from the rooftops yet - I'm feeling a bit more confident this time around.

Do your research - then do your research again. Neighbouring properties - what have they sold for? when was it they sold for that? Bear in mind prices have risen considerably in some parts of the country in recent years. You do have to bear in mind how your mortgage company will value it - but if you have a fair chunk of savings as a deposit - this shouldn't really matter much.

You don't mention the price of the property - but if you plan to live there a long, long time (although things do change and you might sell up sooner than planned) - don't lose the chance of 'winning' by being too tight. And as much as you don't want to go too far over the top - consider how far you'll go to get this particular house, and then go for it, and hope for the best. Money doesn't grow on trees, but if you found out later that you lost out because you were £1000 under the winning bid - how would you feel? (Sometimes of course sellers don't choose on value of bids alone - but position as well).

However it turns out - good luck.

eddddy

The charity would be required to get the best price reasonably possible.

So a charity is likely to advertise the property with a low guide price, and put it on the market for maybe 2 or 3 or 4 weeks - and ask for best offers.

At the end of the 2 or 3 or 4 weeks they will probably look at all the offers, and accept the best one (which will usually be the highest one).


Once an offer has been accepted, the estate agent will try to discourage further offers, because it delays the sale.

Polkadot87

anselld said:

First things first though, have you ascertained that Probate has been granted?  Otherwise you could be in for a long wait even if you do "win".  The final red flag for me would be multiple charity beneficiaries.  It can end up being a bureacratic nightmare actually getting anything through and getting all their respective Solicitors off the gravy train.

It sounds a nightmare!

Yes, probate was granted back in december. It has taken this long for it to come to market, possibly due to multiple charity beneficiaries as you say...

Hoenir

propertyrental said:

And 'full and final' does not necessarily mean final.

If the F&F deadline is reached, and the highest bid identified, what would the charities do if someone then offered 10% more again?

There is no way to avoid a bidding war if multiple people all want to buy the property. All you can do is decide exactly how much you can afford, and how much you are prepared to spend.

There's only so many working  hours in a day. Sometimes it's better to be pragmatic. Use your time productively.  Highest offer many not be the one accepted. 

GDB2222

If you want to be included in the request for final offers, it might be best to put an offer in now. 

Do bear in mind that people often underestimate the cost of doing work to a property.