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    • MissMarble
    • By MissMarble 7th Feb 18, 3:37 PM
    • 38Posts
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    MissMarble
    Understanding offers in excess as FTBs
    • #1
    • 7th Feb 18, 3:37 PM
    Understanding offers in excess as FTBs 7th Feb 18 at 3:37 PM
    Hi everyone,

    After posting on a previous thread with lots of great input and advice, I thought I'd share our latest dilemma/query with hope of receiving some help!

    We are first time buyers and live in Manchester, hoping to buy in a few small towns which are either on the up or already slightly established. Earlier this week we put our first offer on a house, which for a day was the highest - before we got out-bid by another couple who I believe may have offered £1,000 / £1,500 more than our second offer. The house was on for offers over £220,000 and so it is our understanding it may have gone for £225,000+. We were prepared to go up to that, however there was work to be done to the house hence why I think we may have been overly cautious.

    As we were out-bid, we are now back to the drawing board and before we find somewhere else I wondered if you could help with understanding how much to increase offers by? I read that it's generally good to put two offers down on a property and to start out low before increasing - however, I think we are just confused about how much to increase it by and with the 'offers over' it's difficult to go in low to begin with.

    We've noticed the property market in Manchester is extremely quick moving and houses in good areas are SSTC in a week with multiple offers on the table. I've also seen how properties are generally advertised at 'offers over' which adds more confusion because it sounds like there's never a cut off point - i.e. if we offered on a house on at offers over £200,000, how far up should you go bearing in mind there are several other offers?

    I know each circumstance is different, but if anyone can shed any light in terms of offers in excess that would be really helpful. We were gutted to have missed out on the house we offered on and looking back wish we had gone in at the higher price.

    Thank you in advance.
Page 1
    • Lokolo
    • By Lokolo 7th Feb 18, 3:42 PM
    • 19,984 Posts
    • 15,110 Thanks
    Lokolo
    • #2
    • 7th Feb 18, 3:42 PM
    • #2
    • 7th Feb 18, 3:42 PM
    Or, you could just offer what you think is right and say "This is my one and only offer", and if you lose out, move on.

    If you love somewhere and it's long term, a few £thousand, is going to make very little difference over 5-10 years.

    Obviously there is a difference between offering £250k on something thats £220k, but if you were desperate for it, why didn't you go back and offer higher?
    • victoriavictorious
    • By victoriavictorious 7th Feb 18, 4:03 PM
    • 199 Posts
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    victoriavictorious
    • #3
    • 7th Feb 18, 4:03 PM
    • #3
    • 7th Feb 18, 4:03 PM
    I personally steer clear of any listing asking for offers "in excess of" however much I might love the property. When a seller doesn't price their property according to what they want, it just seems that they're trying to make it sound like a great bargain (and fall within a lower search criteria) whereas in fact it could be nothing of the kind, if they are *really* expecting £30K or whatever, over and above.
    If they want it to go to bids, or indeed a higher price, I prefer them to just be upfront about it and say so. The process is stressful and fraught enough as it is, without putting extra (and imo slightly underhand) obstacles in the way.
    I also could not be certain that I wouldn't get gazumped further down the line when I've spent money on surveys, legal fees, etc.
    Last edited by victoriavictorious; 07-02-2018 at 4:05 PM.
    • ReadingTim
    • By ReadingTim 7th Feb 18, 4:07 PM
    • 2,669 Posts
    • 3,814 Thanks
    ReadingTim
    • #4
    • 7th Feb 18, 4:07 PM
    • #4
    • 7th Feb 18, 4:07 PM
    I suggest no more than 3 offers:
    1. opening offer - high enough to be taken seriously, low enough to demonstrate you're not a pushover.
    2. follow up - this is the serious one - you need to be within 10% (or so) of your maximum offer. Ideally, rounded up to the nearest thousand or ten thousand, as psychologically, people like nice round numbers - a hundred thousand sounds better than ninety nine thousand nine hundred to the ears of the vendor.
    3. final/maximum offer - this is the most you're wiling or able to pay. Ideally a random (ie nor round) number, implying you've scrimped, saved, and checked down the back of every sofa to find every single penny you have.

    Some say if your first offer does't embarrass you, it's too high - personally I think you risk coming across as a timewasting dreamer that way. You could always split your serious offers into two, if only to gauge whether the vendor has realistic expectations as to price - regardless of what the market thinks it's worth, if you can't agree a price with the seller, you don't have a sale.

    Finally, your final offer is just that - final. You can't come back with more afterwards. But most vendors expect some element of negotiation, even if it's more of an elaborate charade or courtship dance than hard-bitten haggling, so starting with your final offer will only confuse, as people expect another, regardless of what you say.

    Good luck - you're unlikely to get it right first time, so maybe "practise" on some places you're not that keen on so you get your strategy right for when you see the perfect one.
    • MissMarble
    • By MissMarble 7th Feb 18, 4:08 PM
    • 38 Posts
    • 51 Thanks
    MissMarble
    • #5
    • 7th Feb 18, 4:08 PM
    • #5
    • 7th Feb 18, 4:08 PM
    Or, you could just offer what you think is right and say "This is my one and only offer", and if you lose out, move on.

    If you love somewhere and it's long term, a few £thousand, is going to make very little difference over 5-10 years.

    Obviously there is a difference between offering £250k on something thats £220k, but if you were desperate for it, why didn't you go back and offer higher?
    Originally posted by Lokolo
    Hi Lokolo, thank you for your comment. We are mainly focusing on a house for the next few years (up to 3-4 years) rather than the long term as we may move away from the city. We would have liked to put another offer in, but by the time we found out the vendor had accepted the other one and the estate agent said it was going to be taken off the website - I questioned the same thing, but they really weren't inviting any additional offers.
    • JoJo1978
    • By JoJo1978 7th Feb 18, 4:10 PM
    • 344 Posts
    • 424 Thanks
    JoJo1978
    • #6
    • 7th Feb 18, 4:10 PM
    • #6
    • 7th Feb 18, 4:10 PM
    Don!!!8217;t over think it. For each property, decide the absolute max you will pay. Either offer that and make it clear you won!!!8217;t go higher, or knock 5-10% off to give yourself wiggle room to offer higher.

    Ignore offers over except in Scotland. Your first (and final) offer can be lower than the asking minimum. Unless the vendor has instructed the EA to not be informed of offers under a specific value the EA will pass on all offers.

    Be careful not to end up bidding against yourself, you only have the EAs word about other offers. So if you go in low, wait and ask for it to be left on the table before offering higher. Ask to be kept informed of competing offers and only respond then or when you are asked for a best and final offer.
    Hamster in the wheel (London) 1999-2017
    Mortgage free since 2015; Pension pot sorted 2017
    Part-time gigger and charity volunteer 2018
    • Mr.Generous
    • By Mr.Generous 7th Feb 18, 4:13 PM
    • 1,764 Posts
    • 2,655 Thanks
    Mr.Generous
    • #7
    • 7th Feb 18, 4:13 PM
    • #7
    • 7th Feb 18, 4:13 PM
    Couple of tips,

    Firstly they all need work. When you look round you will not spot everything, even a lovely house will have some things you will change. Don't be fooled into thinking (or being told) any property is absolutely prepared for just moving furniture in, they never are.

    Personally I take no notice of "Offers over" and just look at the price and what I think its worth. Look what has sold locally - not at asking prices.

    I offer on a property and depending on the value I'll go another £1000 if its rejected, unless £500 would settle it I won't go any higher after that, I will tell the agent its my best and final offer and I stick to it.

    Twice now agents have come back to us (We buy and renovate quite a few) after rejecting offers to say the vendor has reconsidered and accepted. We could easily have gone higher, remember even £1000 buys you a few rooms carpeted or decorated.

    Its your money, you work hard for it - spend it carefully and wisely. If you really want a place and your offer is rejected tell the EA your lender won't go any higher, wait a couple of days then offer £1000 more and say your parents have offered to help out but that is your limit.

    The seller will be told your tale by the EA who only gets paid when it's sold and doesn't want to loose a buyer. Bidding wars I would steer clear of. Just pay what you think its worth, not what someone else is prepared to pay. The mystery buyer who outbids you might have been given £50k by their Aunt or won the lottery, or might not exist, who knows.
    • Cakeguts
    • By Cakeguts 7th Feb 18, 4:50 PM
    • 4,363 Posts
    • 6,242 Thanks
    Cakeguts
    • #8
    • 7th Feb 18, 4:50 PM
    • #8
    • 7th Feb 18, 4:50 PM
    If you offer more than the value that your mortgage company puts on it you will be expected to make up the difference out of you savings.
    • ACG
    • By ACG 7th Feb 18, 5:20 PM
    • 16,833 Posts
    • 8,784 Thanks
    ACG
    • #9
    • 7th Feb 18, 5:20 PM
    • #9
    • 7th Feb 18, 5:20 PM
    I sold my house last year for "offers over", I received 2 offers for the asking price (which was all I actually wanted). So my thoughts are if there is something saying "offers over", you are free to offer the asking price.

    To be fair, you are free to offer below that, but chances are it will be declined. I would accepted a couple of grand below what mine was up for, but not a massive amount less.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Crashy Time
    • By Crashy Time 7th Feb 18, 5:34 PM
    • 6,065 Posts
    • 2,347 Thanks
    Crashy Time
    If you offer more than the value that your mortgage company puts on it you will be expected to make up the difference out of you savings.
    Originally posted by Cakeguts

    And in this market who in their right mind would be doing that?


    https://www.theguardian.com/money/2018/feb/07/uk-house-prices-fall-again-as-household-income-squeezed
    • ACG
    • By ACG 7th Feb 18, 6:04 PM
    • 16,833 Posts
    • 8,784 Thanks
    ACG
    Originally posted by Crashy Time
    As I have said many times before, every link you post about house prices dropping, there is one to say house prices are growing:
    https://www.mortgagestrategy.co.uk/house-price-growth-slows-2-2-january-halifax/

    GROWTH slows, still increasing jsut not as quickly as in the past. I bought my house in May, house opposite has gone up for £25k more than I bought mine for and in a similar condition. That is on top top of the £70k I made on my last house. In all those years you have been banging on about house price drops, I have made over £80k even if my house drops by 25%, I will still be in profit.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • buggy_boy
    • By buggy_boy 7th Feb 18, 7:29 PM
    • 412 Posts
    • 283 Thanks
    buggy_boy
    Originally posted by Crashy Time
    Yet another hpc useless link bought to you by Crashy, how is this helpful or relevant...

    To the OP, properties that are fixer uppers are often hard to value, especially those in high demand areas. Often the estate agents suggest a lower price and have offers over in the hope that it will get several interested parties and the bidding war will find the properties value...

    My only suggesting is if you a trying to get these sorts of properties, phone the estate agents on a regular basis (once a week min).. They will often if pushed tell you about properties that they are going to value, if you can get in there early enough and get a viewing before any advertising is done and put in an offer around £5k above the asking price with the proviso no more viewings and any advertising is SSTC. This can avoid the bidding war, estate agents like it as they dont have to do much. The down side is if nobody else liked it you might over pay.. Its down to your skill to value a property, know how much it will cost to do the work (Not as easy as it sounds) and luck.
    • MissMarble
    • By MissMarble 8th Feb 18, 11:12 PM
    • 38 Posts
    • 51 Thanks
    MissMarble
    I suggest no more than 3 offers:
    1. opening offer - high enough to be taken seriously, low enough to demonstrate you're not a pushover.
    2. follow up - this is the serious one - you need to be within 10% (or so) of your maximum offer. Ideally, rounded up to the nearest thousand or ten thousand, as psychologically, people like nice round numbers - a hundred thousand sounds better than ninety nine thousand nine hundred to the ears of the vendor.
    3. final/maximum offer - this is the most you're wiling or able to pay. Ideally a random (ie nor round) number, implying you've scrimped, saved, and checked down the back of every sofa to find every single penny you have.

    Some say if your first offer does't embarrass you, it's too high - personally I think you risk coming across as a timewasting dreamer that way. You could always split your serious offers into two, if only to gauge whether the vendor has realistic expectations as to price - regardless of what the market thinks it's worth, if you can't agree a price with the seller, you don't have a sale.

    Finally, your final offer is just that - final. You can't come back with more afterwards. But most vendors expect some element of negotiation, even if it's more of an elaborate charade or courtship dance than hard-bitten haggling, so starting with your final offer will only confuse, as people expect another, regardless of what you say.

    Good luck - you're unlikely to get it right first time, so maybe "practise" on some places you're not that keen on so you get your strategy right for when you see the perfect one.
    Originally posted by ReadingTim
    Hi ReadingTim,

    Thank you for your detailed and helpful reply - I think we will certainly take your advice. We viewed a house this evening which went on the market on Monday, it already has 5 offers on the table and best and final tomorrow. The house was lovely and is on for offers over £200,000 but apparently thereís lots of first time buyers interested and with it being best and final we are feeling quite clueless. Obviously we donít want to in too high, but it just seems so broad! As we only got a chance to view it this evening we couldnít get much of a look around the area (even though its generally meant to be a popular place) as it was dark and raining but think we may make an offer as we liked the house a lot and feel we may gain some experience in this type of scenario even if we loose out! I just wish we had upped our offer on the last place mainly due to the location of it but think nerves got the better of me.

    Also do you know if an offer is ever accepted and after only viewed once, is it frowned upon to pull out at that early stage if something is spotted in a second viewing? Thanks again for your help.
    • Asl77c
    • By Asl77c 8th Feb 18, 11:18 PM
    • 71 Posts
    • 51 Thanks
    Asl77c
    If you offer more than the value that your mortgage company puts on it you will be expected to make up the difference out of you savings.
    Originally posted by Cakeguts
    Originally posted by Crashy Time

    You won't know you are offering over what the mortgage company values the property until you have an offer accepted and then the mortgage company carries out their survey valuation so noone ' in their right mind ' would do it. You never know how a mortgage company will value a home. you could pay under asking price for a property and a mortgage company can value it even lower.
    Last edited by Asl77c; 08-02-2018 at 11:20 PM. Reason: wrong quote
    • MissMarble
    • By MissMarble 8th Feb 18, 11:29 PM
    • 38 Posts
    • 51 Thanks
    MissMarble
    Couple of tips,

    Firstly they all need work. When you look round you will not spot everything, even a lovely house will have some things you will change. Don't be fooled into thinking (or being told) any property is absolutely prepared for just moving furniture in, they never are.

    Personally I take no notice of "Offers over" and just look at the price and what I think its worth. Look what has sold locally - not at asking prices.

    I offer on a property and depending on the value I'll go another £1000 if its rejected, unless £500 would settle it I won't go any higher after that, I will tell the agent its my best and final offer and I stick to it.

    Twice now agents have come back to us (We buy and renovate quite a few) after rejecting offers to say the vendor has reconsidered and accepted. We could easily have gone higher, remember even £1000 buys you a few rooms carpeted or decorated.

    Its your money, you work hard for it - spend it carefully and wisely. If you really want a place and your offer is rejected tell the EA your lender won't go any higher, wait a couple of days then offer £1000 more and say your parents have offered to help out but that is your limit.

    The seller will be told your tale by the EA who only gets paid when it's sold and doesn't want to loose a buyer. Bidding wars I would steer clear of. Just pay what you think its worth, not what someone else is prepared to pay. The mystery buyer who outbids you might have been given £50k by their Aunt or won the lottery, or might not exist, who knows.
    Originally posted by Mr.Generous
    Thank you MrGenerous (great username by the way!) for your super helpful advice. I do try and keep an eye on the house prices in areas we like, but I always get so surprised by how much they end up selling for - although Iím starting to become a bit more immune to the reality. Now that we had a few days to recover from our first offer experience, I wish we had just increased it that little bit further as I think that may have worked to our advantage - but who knows, maybe not.

    I think it gets so confusing especially after viewing a house today in quite a popular area with FTBers, to hear that even though it went on the market on Monday, it already has (at least) five offers on the table. Itís on at £200,000 and best and final are to be submitted tomorrow - we really liked the house and had everything on paper but just a bit concerned about the area as we couldnít see it in the daylight and obviously donít want to overpay but need to be realistic. The house was in a good condition but trying to think of a suitable figure after a ten minute viewing is quite tricky.

    As for the work, a few weeks ago we looked at one house which needed a lot of work doing so now seeing some obvious signs of improvement doesnt faze me as much as they may have done previously, but we completely understand a lot could be lurking elsewhere! Good luck with any new renovations!
    • zorber
    • By zorber 8th Feb 18, 11:52 PM
    • 1,057 Posts
    • 932 Thanks
    zorber
    In my area lower price houses seems to be going in a few days whilst slightly higher priced houses are stalled.

    I just bought a house which stated for offers over, i completely ignored that and went in £20k under, i expected it not to be accepted and added £10k once that happened then i paused and started rejecting the estate agents requested that the vendor needed more. I justified my position to the estate agent by pointing out other nearby houses which may have been bigger for the same money and also i could by a new build property on the same estate for the less money, same size house and get to pick all the colour schemes etc.
    In the end i agreed to meet them in the middle by adding £5k to my offer and this was £5k under their offers in excess of.
    The houses garden was what i was after as i wanted side gate access to be able to site a caravan down the side of the house or in the back garden for storage.
    Its worth noting that when you look around the house be observant, the owner was saying they were in no rush to sell, however the facts appeared different, they had already dropped their asking price by £10k and the house had only been on the market a few weeks, then the owner has left out a congratulations on your new job card. Whoops. it turns out they wanted a quick move.

    So depending on your local market and how quick house are moving depends on what you should do. I cant advise there, but offers over does not always mean offers only. There is no harm in offering lower.
    "Save the cheerleader - Save the world"
    • Lauralou79
    • By Lauralou79 9th Feb 18, 7:23 AM
    • 191 Posts
    • 174 Thanks
    Lauralou79
    As someone who bought in Greater Manchester last year as a FTB I don!!!8217;t think you are doing anything wrong or there is a right or wrong way. You are right the market is fast moving for houses in a certain bracket.
    The first house we offered on needed a bit of work it went to food nail bids a week after being on sale. I didn!!!8217;t over offer as you have to take in the work/ costs but in the end we lost it by a thousand.
    Anyway a house that needed less work finally came up and had features etc basically I loved it. They put it up Thursday we viewed sat ( they had viewings all weekend) luckily the vendor liked our position n after price negotiation we got our lovely house.
    Anyway I was wondering reputed to go higher as I loved the house so much.
    • Lauralou79
    • By Lauralou79 9th Feb 18, 7:27 AM
    • 191 Posts
    • 174 Thanks
    Lauralou79
    Accidentally posted that, I think when you find a house you really love you will be prepared to offer more than you think (within budget) Slightly different if you aren!!!8217;t planning on being there long maybe?. You can only offer what you think you want to pay.
    • The Palmist
    • By The Palmist 9th Feb 18, 7:59 AM
    • 709 Posts
    • 291 Thanks
    The Palmist
    I want to share an experience from 10 years ago.

    House was on for overs in excess of £120K, we viewed liked and offered £122K then increased to £125 and were willing to go to £130K.

    Express agency told us that Vendors are expecting around £150K, which made no sense to me.

    We moved on and bought a similar house in same street, few months later found out that Express sold that house for £110K......to date I wonder why they didn't sell to us when we offered £15K more and were FTBs in a strong position to proceed.
    Nothing is more damaging to the adventurous spirit within a man than a secure future. - Alex Supertramp
    • ashe
    • By ashe 9th Feb 18, 9:54 AM
    • 530 Posts
    • 367 Thanks
    ashe
    I would absolutely ignore the terms used by EAs in listings

    Offers Over
    Offers In Region Of
    Offers in Excess of
    Guide Price

    etc

    Offer what you think the house is worth, its all marketing.
    Last edited by ashe; 09-02-2018 at 9:59 AM.
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