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Bidding war. How should I play this?(48 Posts)
I'm a first time buyer and have had some really bad luck so far trying to buy a house. House 1, I paid for home buyers and structural engineer report and it all fell through at the last minute. House 2, my offer was accepted and then a cash buyer bought it two days later.
House 3 I went to see yesterday and I love it. It's under my budget, close to schools and big enough for me and DC's. It's priced between 150k and 160k and I put an offer of 160k in but the estate agent told me someone already offered 155k and the bids will be put forward on Monday and we will have an oppertunity to put in our best and final offer.
I really want this house and there has been alot of interest but I don't want to end up offering more than its value and then not being able to get a mortgage. I was thinking of offering 175k but scared this won't be high enough (or too high and I pay 10k more than I need to).
Has anyone been in this situation before and how should I play this? Did I mention I REALLY want this house?
Hang on your existing bid is £5k above the other bid and you are a FTB. I would not increase my bid at all until I had confirmation the other bidders had increased theirs, otherwise you are just bidding against yourself.
As the other poster said, you have already offered the higher amount, so tell the estate agent ( who is being very cheeky) to put your offer to the vendor immediately. By law they have to.
Only if they come back and say the other buyer has offered the same, and ASK TO SEE PROOF IN WRITING, should you consider going higher.
It seems like the estate agent is trying his luck as you are a FTB, don't let him.
Thank you so much for your replies. I didnt realise they had to submit the offer immediately by law. I did think it was strange at the time because on the other houses, my bids were immediately given to the vendor.
I know I'm the higher bidder but the estate agent hinted (told me) the other persons offer and I know they will go back to the other bidder and tell them my bid on Monday so they can increase theirs. Is it normal to have a closed bidding system like this on a house that isn't an auction? I'm willing to go up to 180k in reality so I'd rather pay abit more to get the house but if I have to give a final offer tomorrow then I don't know how high to go.
I think it's likely that they will say someone else has made a higher final bid and I have to submit my best and final 'blind' so to speak. Can I really ask to see the other persons offer?
The EA made it seem he wasnt allowed to tell me.
Personally I'd say that was my final offer and then walk away.
Each time I've bought I lost out on the first place (for various reasons but last time I was gazumped) Each time I ended up with a place that was much better.
Be careful about offering so much more than potential market value. 175 or 180 for a 160 house may well fall through when your mortgage lender values the property, unless you are a cash buyer or have a very significant deposit this could cause you problems. Your estate agent sounds like an ass
The EA works for the vendor. Their job is to get as much as possible for the vendor.
The EA is being very cheeky.
Be aware that my friend had this same thing happen to her. They put in their highest and final offer in good faith as a sealed bid by the closing date. Then the day afterwards, the EA contacted them to say that they had been outbid by £5K in the sealed bids, so would they like to increase their offer?!
It seems very likely that this is just a rather dodgy ruse to try to ramp the price up beyond market levels. There is nothing stopping the EA from trying to carry on the bidding war afterwards. There is also nothing to stop you from putting in a high bid and then gazundering them afterwards once the other buyers have moved on (not that I'm recommending this; I'm just pointing out how artificial this whole "final-bids-final-closing-date" situation is).
I would not let them rattle you like this. Tell them you're not prepared to play that game, but you are prepared to go through the normal process of hearing about other buyers' offers (in writing) and then considering whether to increase your own offer. The EA wants to get the highest possible price for the seller. So they won't want to cut you out of the running without offering you the chance to outbid any other offers they receive.
Why not canvas your offer. Tell the agent that you’ll offer £x above the highest bid eg highest bid is £170,000 you’re prepared to pay £2000 more so therefore your offer would automatically be £172000. You’re welcome to withdraw if the offer gets too high. This all hangs on how trustworthy you think the sellers agent is though!!
Yes it's not uncommon. A property I sold for had several offers in the first week so we we t best and final. But it was final - you couldn't then go back to another bidder to increase their offer. In the end I sold for about 5% over asking. There were a ra gke of bids and the top was well above what I accepted but they had not sold their property and the buyers i went with were under offer through the same agent (so they were doubly incentivised to see the sales go through).
I'd increase it to something like £160,800 or £161,600. But no more.
I'm in a relatively good position as I have a large deposit (100k) and also no house to sell but I'm not sure what position other buyers are in.
I don't trust the EA to not play games if I say I'll pay X amount over the highest bidder as like you say, they are working for the vendor. I'll go in tomorrow and say I want to see the offers in writing before I increase.
To be honest, i think the house is priced low (based on size/condition) but i guess it will be in line with market value so i don't want to be stuck not being able to get a mortgage. I guess anyone other than a cash buyer will have this problem too though so surely there has to be a limit to what others will offer too.
I'm not going to get any sleep tonight!!!
You don’t go up until you’re told that the other bidder has put in a higher offer because they might not do that. And then you will have wasted 15k. Plus the house might not be worth that. Don’t get into a position of losing money on a house when you come to sell. Just because you’ve fallen for it now and are prepared to pay over the odds doesn’t mean someone else will feel the same when you come to sell.
Though if it’s a long term house that’s less of an issue.
Pipandmum is right change your bid to an obscure amount £161,123 or something most people stick to the round figures so going the opposite could tip you over by the £123 to being highest bidder.
The plan is that it's a long term house. That's why I'm so keen on it, because it's big enough for DC to have their own space if they are unable to get on the housing ladder as adults.
My dad thinks I should just increase to 170k before I even know what the other offers are but as you say, I could end up paying an extra 10k for nothing.
I'll take your advice and offer a random number to increase my chances if it comes to it. The EA know I really want this house, I definitely wore my heart on my sleeve.
I'm so bad at this, my poker face is awful 😂
We had a little something like you. I told the ea that as our deposit would be 150% of the mortgage amount, I expected no problem (and already had a bank offering).
EA went very quiet while he worked it out and then got more enthusiastic. We were a customer worth cultivating.
And remember just because the agent says it’s best and final offers does not mean it is final offer. If they were to come back to you and say, sorry someone bid higher. You can increase your offer then and they legally have to put offers forward. Of course the vendor may decide not to listen to further offers, their choice.
The EA knowing you Really want the house is no bad thing. The vendor will will want a committed buyer, not someone who drops out 2 weeks down the line.
Do not take your dad's advice and offer 10k over! The estate agent has to put all offers forward, so wait and see the outcome from your initial offer before going further. Take the advice other posters have given about seeing other offers in writing before increasing yours. You are in a very strong position because of your large deposit and being a ftb!
Why bid yourself up
You are the only person to have offered the asking price and are in a very strong position
The offer is there ask the agent for the response from the seller as they should have put it forward already
I'm going to hold my nerve and see what happens today. I'm scared because I've been through this 3 times now and have been desperate to move since the beginning of this year.
I'm in England but heard the Scottish system is much more straight forward?
Please let this be 3rd time lucky 🤞
We keep having to go through this, and I was heartbroken when we lost out on a property we loved recently. We fell in love with a house that was on at 190K. It was on at the asking price, not offers over etc. so we went in at 195K. On the Monday, after viewing it on the Saturday, I was told we were the highest bidders, however, they were going to best and final (Why!!!!) - we were annoyed as we already went 5K above the asking so we upped it to £197,200. We didn’t get it. There was an offer higher than ours at 200K, and even though we were in a better position (FTB, no chain etc), they went with that offer. We were in a position whereby we can afford to go above much more than the value of the property as that all the lender will lend on, and we don’t have much more than a 10% deposit. It’s a tough one as I don’t want to more than what’s its worth, but also you don’t want to lose the house you love for the sake of a few grand like I did.
I actually disagree with most PPs. We were in similar situation recently while house hunting. The area’s popular so it’s mostly best and final process. We were told by when (date and time) to make our final offer in writing and provide proofs of deposit and mortgage offer. There was no opportunity to increase the offer after that and no one showed us the winning offer. It’s a popular area so it’s sellers market. A couple of times we offered asking price straight after viewing and didn’t increase it later for best and final. We were not chosen. People would tell that someone offered more. But no, as it was more than an year ago, the prices paid are known now. The final sale prices were what we offered and in one case even less than we offered. I guess that someone offered more (unrealistically) and then dropped their offer at a later time because of the surveys, valuation, mortgage ... of course there is a risk that you will pay for a survey it will come back with lower valuation and the seller won’t accept the lower price.
I would look at bigger picture: are you in rental, what the alternatives, how long you are going to stay in this house, how about schools , commute, etc. 175 is probably too big jump but depending on the house and your circumstances it could be more or less.
And I was in position twice when vendors preferred FTB as they wanted to move quickly because of the new job and twice when vendors didn’t want FTB as they were not ready to move quickly themselves. You just never know.
As said further up thread you've already put in asking price and £5k above the other offer. Legally the estate agent has to put your offer forward. The EA sounds a bit of a shark tbh. At asking price and £5k above the other offer your offer should be accepted. Why is he talking about sealed bids? You are in a good position and I would be very happy to accept your asking price offer.