House we like already under offer by someone else but there’s an issue

Fisa002 · 12 January 2018 at 6:34PM

Hi there.
I have lurked around this forum for a few weeks after deciding I’m ready to purchase my first home. I’m a newbie to buying so bear with me if I ask something which may surprise some members. I literally just wanted other members thoughts and advice.

So, I have been looking to purchase my first home to live in for a couple of months and viewed a few property’s. There wasnt any properties really that I liked. I came across an area where there are about 3 houses for sale. 2 are very similar and are three bed town houses, and are priced around 220k. I love the area and the houses but found some of the rooms a little small for my liking and been pondering whether I should make an offer or not on one of the two. After viewing the second one of the 3 bed houses today I noticed a house around the corner with the same estate agent that is 4 bedroom house but much bigger inside ( after I looked at the property online). The guy from the estate agent told me that That house was under offer. It’s on the market for 270k, however there has been a problem with the current offer because the house valuation has come in lower. The house still listed online as being ‘under offer’.

I asked the estate agent how much the offer is on for and he wouldn’t say, BUT he did say that THAT house would be more to my liking and needs and that I shouldn’t worry, and that he would keep me in the loop.?? (Obv 270k is well over my budget which was around 230k stretched to about 240k.) He also did mention that an offer of 250k may do the deal if there’s a problem with the current offer ( I got an impression that there is). (And presumed the offer currently maybe lower that 250k?)

So my questions are, who has valued the house higher? The bank or the conveyencer, and why would this be an issue to the buyer if they was happy to make that offer in the first place?

And is the estate agent trying to obtain a second offer or higher offer? I don’t really want to gazump somone else if they have there heart set on the house.

And if that doesn’t go through the likelihood of me making an offer lower towards my budget if that current one doesn’t go through ?

I’m really confused as you probably can tell and would appreciate members advice on my options and your thoughts on this. ( apologies for the long first post)

moneyistooshorttomention · 12 January 2018 at 6:39PM

This is where you make it plain to the EA you are potentially v. interested in that house/decide whether you're prepared to make an acceptable offer on that house (which could be too high for you to be able to afford it from what you say:() and ask the EA to give you "first refusal" to take a look at the place IF the current buyer for it falls through.

If they do fall through - then you're in luck - provided you can afford it.

If you can't afford it and/or the current offer doesnt fall through = better luck next time

Slithery · 12 January 2018 at 6:41PM

Fisa002 wrote: »

So my questions are, who has valued the house higher? The bank or the conveyencer, and why would this be an issue to the buyer if they was happy to make that offer in the first place?

Chances are that it's the buyers mortgage provider that has valued it at lower than they have offered, leaving them unable to get a mortgage.

hazyjo · 12 January 2018 at 6:46PM

Slithery wrote: »

Chances are that it's the buyers mortgage provider that has valued it at lower than they have offered, leaving them unable to get a mortgage.

They could get a mortgage, but would have to make up the rest with cash. Depends if they want to overpay (many do with a low valuation), and if they have the dosh.

I would guess the offer is higher than £250k but that the valuation has come in at around £240k-ish. Just a hunch though.

studentguy · 12 January 2018 at 6:48PM

My worry would be that in that situation that the same would happen to me - you don't know what the bank has valued it at, or why they've come to that figure (maybe something is wrong with the property somewhere?) - and you'd lose money on fees and be in the same boat

Fisa002 · 12 January 2018 at 6:56PM

The estate agent knew that I was very interested as I was describing what I wanted when he was showing me around the smaller house. He knows I am chain free and have a MIP. He also has said that he would let me know next week and ‘not to worry’ and also said ‘ he would be in touch if it fell through’.

Why do you think he said 250k would get me that house? Tbh 250k is 10k over my absolute budget. I don’t really think it’s worth the 270k it’s on for at all.

And when I asked what the valuation came at he laughed at winked at me. Is this information not usually given out? Sorry to ask this question but I really don’t know the answer.

Fisa002 · 12 January 2018 at 6:58PM

Do you think if I had it valued once I made an offe the same thing would happen? And if it’s valued at 240k that’s totally my max budget.

moneyistooshorttomention · 12 January 2018 at 7:08PM

Fisa002 wrote: »

The estate agent knew that I was very interested as I was describing what I wanted when he was showing me around the smaller house. He knows I am chain free and have a MIP. He also has said that he would let me know next week and ‘not to worry’ and also said ‘ he would be in touch if it fell through’.

Why do you think he said 250k would get me that house? Tbh 250k is 10k over my absolute budget. I don’t really think it’s worth the 270k it’s on for at all.

And when I asked what the valuation came at he laughed at winked at me. Is this information not usually given out? Sorry to ask this question but I really don’t know the answer.

I'd interpret that as meaning the valuation came in at £250,000 from what you say.

Offer that you might get it.

Offer less and chances are you won't.

Annie35 · 12 January 2018 at 7:09PM

IF the vendor was okay with selling at the lower valuation surely they would continue the sale with the current buyers, no?

Cakeguts · 12 January 2018 at 7:13PM

There is a house for sale at £270k It is has had an offer accepted on it. The valuation is lower.

So the buyer either makes up the difference between the offer and the valuation with cash or they drop out.

If they drop out there is no guarantee that the vendors will sell the house for any less than that offer. A buyer with a bigger deposit could come along. The vendors may decide to not sell the house if they can't get what they want for it.

It is unlikely that the vendors will accept an offer of £230k or £240k when they expected to get around £270k especially if as you say it is a much nicer house than the ones you have been looking at.

It is not a good idea to look at houses you can't afford. The most likely outcome of your situation will be that they EAs have other people also interested in this house who can afford to pay more for it than you can. They aren't going to tell you if this is the case.

eddddy · 12 January 2018 at 7:17PM

Fisa002 wrote: »

He also did mention that an offer of 250k may do the deal if there’s a problem with the current offer ( I got an impression that there is). (And presumed the offer currently maybe lower that 250k?)

You can read it many different ways, but I'd suspect that the current offer is £250k - or maybe higher.

i.e. The EA wants to get you into game with an offer of £250k and get you excited about the property, then tease you upwards.

Plus, if you offer (even if it's too low), the EA can scare the other buyer by saying that somebody else is chasing the property.

Fisa002 wrote: »

And is the estate agent trying to obtain a second offer or higher offer? I don’t really want to gazump somone else if they have there heart set on the house.

In general, EAs don't like gazumping - it gives them extra work, it delays the sale, and the extra few quid in fees aren't worth it.

The main thing the EA wants is the quickest possible sale, so they want you ready to jump in asap, if the current buyer drops out.

But obviously, if the current buyer's lender has down-valued the property, your lender might as well. Would you buy it, if your lender down-valued?

PLEASE READ BEFORE POSTING

House we like already under offer by someone else but there’s an issue

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free