FTB and sealed bids

HelpMeMove

Hi,

been snooping for a while now but this is my first post. Please be gentle.

My wife and I are FTB's and recently put an offer on a house that came on the market 2 weeks ago for a guide price of £435k. There's no chain as the owner is elderly and moving to a home and her son is selling the house and looking to complete quickly. We love the place and offered £390k and apparently they've had 4 other offers all below £400k and all with nothing to sell so its gone to sealed bids.

We're going to offer £406k. What are thoughts on this?

We have to put the offer in writing and below is the letter, all criticism appreciated.

Thanks


Dear xxxx,

My wife and I have considered our position and wish to make a best and final offer of £406,000 on xxx subject to contract and without prejudice.

We are first time buyers currently living in an apartment owned by my wife’s parents, and are not dependent on the sale of any properties nor tied to any tenancy agreements.

We have a 50% deposit and a mortgage for the remainder has been agreed in principle with xxx. Please contact their Mortgage Advisor with ref. xxx

Mr xxx
xxx
xxx
Mobile: xxx
E-mail: [EMAIL="attiqurrehman@halifax.co.uk"]xxx[/EMAIL]

We are not bound by any contracts at our current address and have nothing to sell so we do not anticipate any delay with regards to exchange of contracts. It is in fact in our best interest to complete as soon as possible as my wife’s parents are losing a rental income.

We have instructed solicitors and their details are:

Ms xx
xxx
xxxx
Tel: xxx
Fax: xx
E-Mail: [EMAIL="info@chequers-solicitors.com"]xxxx[/EMAIL]


My wife and I are first time buyers. We are both smitten with the house and while we do not have any children at the moment we intend to make this our family for many years to come.

We feel our position is a very strong one and the offer we have made a fair one. We hope you consider our bid seriously and look forward to hearing from you.

Kind Regards

KellsBells

*make this our family home...*
Missed a word.

Can I just ask (and hoping not to speak out of turn) How will you feel if 406,000 is not accepted? If this is really your best offer and you cannot go higher then that is fair enough. However, what I would just alert you to at this moment is that the process of sealed bids usually denotes that should your bid not be accepted, the vendor would not consider any further offers from yourselves. (at least that is how it works in the sale of a repossession)

If your intention was to offer 406k and if the vendor accepts 406,500 then increase your bid to 407k etc, then please be wary. If the vendor sticks to the sealed bids, you may lose out.

I think the letter if great, and informing of your family plans is a good idea as it may gain you some preference against the other buyers.
Good luck, and I really hope you get your property. let us know how you get on.x

Trollfever

A couple of comments:

final offer of £406,000

Offer say £406,234.

We are both smitten with the house

Don't tell anybody this!

HelpMeMove

Thanks KellsBells. The house requires modernisation, offering a higher bid will eat into that. We pushed it to £406k.

Good point Trollfever. I thought adding how we feel about the place would show we're keen and serious?

happinessfactory

Do you live in Scotland?

If not, your sealed bid means precisely nothing. We discovered this last year.

There's absolutely nothing to stop the vendor going to the best placed person, or the person who placed the second highest offer, and asking them to match the highest offer, or exceed it.

And so on and so on between the rival bidders until the agent and the vendor get the the best price.

So Trollfever is absolutely right not to mention how much you love the house.

Bid what you think the house is worth, both objectively and to you, and don't fall in love with it as this will obscure your judgement.

Late last year we were outbid in a sealed bid on a house by £7k. Our agent (the house was on with four) knew we had substantially more to play with and couldn't believe it. She kept advising us to increase our offer, but we'd offered what we thought the house was worth to us, and refused to raise it any higher.Why would we want to overpay in an uncertain market, particularly on a house that needs total refurbishment and could potentially be a real money-pit?

Shall I tell you the biggest irony? The people who eventually bought it at the highest price forgot to budget for the cost of renting during renovations whilst also paying the mortgage on an uninhabitable house, and are now living in a portakabin in the back garden :eek:

HelpMeMove

Thanks for your post happinessfactory.

No we don't live in Scotland.

But you are right, even after absolute highest bids there is nothing to stop vendor from starting a bidding war, especially since there are a few of us in similar positions. I'll reword it.

Houses in the area at this price don't come up very often, the average price is quite high and the only way we can afford to live here is by taking on a renovation project.

happinessfactory

HelpMeMove wrote: »

Houses in the area at this price don't come up very often, the average price is quite high and the only way we can afford to live here is by taking on a renovation project.

Snap. But I completely believe we'll eventually get a great house, and so will you.

Best of luck, I truly hope you win the bid, but don't bid more than you can afford and allow for huge cost over-runs in the renovation. You don't want to be living in a portakabin all winter now, do you?:eek:

HelpMeMove

happinessfactory wrote: »

Snap. But I completely believe we'll eventually get a great house, and so will you.

Best of luck, I truly hope you win the bid, but don't bid more than you can afford and allow for huge cost over-runs in the renovation. You don't want to be living in a portakabin all winter now, do you?:eek:

Thanks. Have only just sent the letter. Now the waiting game.

Good luck to you too.

lypsey

Hope you don't think I am rude but are you putting a large deposit down?? And what is your joint salary??

I only ask because 1st time buyers don't normally have such big houses??

HelpMeMove

lypsey wrote: »

Hope you don't think I am rude but are you putting a large deposit down?? And what is your joint salary??

I only ask because 1st time buyers don't normally have such big houses??

We're putting a 50% deposit down (our savings and help from both the parents) and the remainder mortgage on a joint salary of £75k. We estimate £50k to bring it up to how we want it with extensions etc.

It's not a big house, its a 3 bed. We're paying for the area.

HelpMeMove

They only bloody accepted!

Wooo hoooo. I was told there wasn't a lot between the offers its our position and the fact we wanted to make this our family home that swung it.

Roll on the difficult partt........