Ethics of making several offers - opinions?

merlinthehappypig

I'd be interested in people's views on this.

In Scotland, when we sold, we got to the stage of asking people for bids. The highest got the house. This system forces people to put a once only, best offer in. You don't get a second chance so have to bid as much as you are prepared to pay.

We are now looking to buy in England. After the last couple of days viewings we have finally found a few houses that we would be interested in, three to be precise.

Each of the three houses have strengths and weaknesses and they are all around the same sort of price. The bottom line for us is that we would be happy with any of the three, but it comes down to price. All three houses have been on the market for at least 5 months.

I'm considering making the same offer on all three, around 15% below asking price, making the agents aware that we are doing this and that we will buy the house whose price is closest to our offer.

To my way of thinking this is just the same as buyers are expected to do in Scotland, only in reverse. If the sellers think that they have one shot at selling the house to us, then my reasoning is that they will come back with the lowest price that they are prepared to take.

Clearly it's perfectly legal for us to do this, but it's not something I've read about or considered before.

Any comments, good or bad, would be welcomed.

PasturesNew

If you are being up front about it, there's no problem as you're not misleading anybody or raising the hopes of private buyers.

Where I used to live, it was common for small developers to go round offering on up to 6 houses at a time to see who would take their low offers.

I think it would be a bit mean if sellers were under the impression that theirs was the only house you'd offered on. But that's just a moral issue - and you will be telling the agents that it's a choice of a few.

That way it will concentrate everybody's mind too as each agent and seller will know there's others you're interested in.

merlinthehappypig

I certainly wouldn't want to give the impression to owners that we were only offering on theirs. Apart from being a bit mean, I agree, it would defeat the object of what we are trying to achieve.

It's just so hard at the moment to know what to offer. Everyone's circumstances are different, but all sellers will usually have a bottom line that they won't go below. Trying to winkle this out is the hard part!

Tiglet

I've found that estate agents often act on the assumption that every first offer will be followed by a second offer. Quite often they don't even put your offer to the vendor at all but simply tell you that it has been rejected.

If, instead of increasing your offer, you just move on to the next property, the agents will soon get the message. As far as they are concerned, ethics is a county, so I wouldn't be too bothered about that. To the vendor, you have made a genuine offer that they can either accept or reject - again no problem, so long as you make it clear that you are making more offers than you intend to follow through with.

gingin_2

I think it sounds sensible and as potential ftb's it might be something we adopt.

Would you mind keeping us informed of how it goes? I really am interested.


Good Luck

silvercar

As far as they are concerned, ethics is a county

:rotfl: :rotfl: :rotfl:

theGrinch

nothing wrong in offering on other properties as sellers can get numerous offers. fairs fair.

merlinthehappypig

Thanks for all the replies - I appreciate the comments. I thought I might get shot down a little, but everyone so far seems to think it's a decent idea.

I certainly will keep you informed.

pink_muppet

We did exactly the same thing a couple of months ago, looked at a lot of houses and narrowed it down to 2 which we would have been happy with either but it would come down to price, one was at £244k the other offers over £225k (was originally up at £250k) the first had been on the market about 6 months, the 2nd over a year, we offered £215k on each telling the estate agents the truth and that it would come down to price

both rejected us initally, the £244k house said they would not accept anything less than £235 but the £225k house said they would accept no lower than £220k, we went back in at £218k and got it, just last week the £244k ea phoned us to say they would now accept around £225k but its too late

I would say just be honest with everyone, you're in a strong position and could potentially get a good deal

merlinthehappypig

If I'm perfectly honest it didn't really work as well as I had hoped, for a number of reasons.

We offered on four houses in the end and made it perfectly clear to the agents what we were doing. No problems there, they all seemed quite happy.

The initial problem was that two of the houses had already had offers above my initial level and rejected them. I was around 15% under so didn't really expect that to be accepted anyway, but it took a little of the pressure away from them that I was hoping to create.

Three of them came back with figures, but none of them were as low as we had hoped, two at about 5% under and one at 2%. The other one, which typically we like the best, won't give us a figure, just wants nearer the asking price, which is no use at all. That said, that one sold, new, just under 12 months ago and the current full asking price would see them making a loss after taking stamp duty into account.

I still think this has merits, but might work better on an estate where a number of identical houses are up for sale. These houses were all different (and in different parts of the country).

Whether or not it's just bad luck all the houses we like won't reduce and the ones we do won't by much. Of the 7 we viewed last week the three we didn't like have reduced the asking price by 8%, 16% and 17% respectively and the ones we did like won't budge by more than 5%................This is typical of our experience so far.

dolce_vita

You need to be patient merlin. The right house at the right price will come along soon.

Also, if I was in your position, I would use the same tactic but with a little variation :

I would tell every vendor that the others are desperate to sell.
Their first reaction will be to say "well we are not desperate to sell" (even if they are) and refuse your offer.
But it will plant a little thought into their heads.

And when they sit down and think about it and if time passes without any further offers they may actually start to panic. They may then see big reductions as their only hope.

Even if they never become desperate in the true sense of the word they might just want to sell because they see prices falling around them.

I'm not saying it will work, but it's a little psychological trick and worth a try.


best wishes to you.