To offer way over asking price for our ideal family home??

[Denialisagirlsbestfriend]

Hi, we are looking to move house with our 3 young DC. We love our current home but it’s just not big enough and extending isn’t really an option. The market where we live is fast and houses don’t last long in the area we want to live (within walking distance to school and local park etc). There’s not really been many houses that have come up that we’ve felt excited about.

We’ve viewed a house that would be absolutely perfect for us, we’ve put an offer in £5k over asking price but it’s had a lot of interest and it’s likely to go to best and final offers. The house has already been extended etc so it’s unlikely we can add much value to it, but it could be the perfect home for our family for the next 20+ years.

My question is, would we be crazy to offer £15-20k over the asking price as our best offer? Knowing that we won’t be able to add much value to the property?

YABU - you could loose money in the long run and it’s not worth it. Look for somewhere within driving distance to school.

YANBU - if it’s perfect for you then go for it!

If you can afford it and you don't want to lose it then go for it!

If it's perfect then go for it

If you're relying on a mortgage, you need to make sure you are not tight on the amount you can borrow though in case they value it at less

Depends a bit on what percentage that is, but if you’ll be in it for 20 odd years then your happiness there is probably worth it.

Are you the most attractive buyers possible? Have you sold and are ready to proceed?

This is a good point. If the survey values it as the asking price then does that still work?

If it’s a forever or long-term home then go for it. The only thing I would caution is depending on the mortgage you need you might need to bear in mind what the mortgage provider will value it at.

You need to make sure the LTV isn’t affected.

If it is generating a lot of interest and offers then it is likely it has been marketed at a low initial price, either by mistake (sometimes it is hard to value property if not a lot sells in a particular area) or deliberately to generate interest as a kind of public auction.

At the end of the day you bid what it is worth to you and what you can afford to pay.

I'd definitely do it if you can make it work with the finances. £15-20k over the years you could live there is nothing, in the scheme of things, for a wonderful house, in a brilliant location.

Too many people look at houses as an investment.

If you truly think this is your forever home then offer whatever you can afford.

What difference does it make if you pay 20k worth more than it is today if you are going to live there for 20+ years?

Just be careful with your morgage application. House prices have rocketed where i live since covid. I know at least 4 applications in the last three months have been rejected as the morgage providers undervalued the property.

Where I live people often pay far more than 15-20k over in order to secure a home. Many on my road have paid 150-300 over. As long as you have enough equity and the valuations support it, it's not a problem at all especially for such a small amount over. I'd speak to your mortgage lender and get an offer in quickly.

This

Round here agents will sometimes use a deliberate strategy of under pricing in order to get lots of interest and then going to sealed bids/best and final. In these situations the winning price is often WELL over the initial asking price. Bluntly if you don’t over offer you will likely not get it.

We sold our family home for over 25% above valuation, it’s what it was worth to the buyer.
If it’s worth that to you and you can afford it, do it

Are you the most attractive buyers possible? Have you sold and are ready to proceed?

Another good point. Being chain-free would matter more to me than a huge money offer. So balance your offer so it makes sense for your situation. If it does come down to cash, and I could afford it, I'd consider going to £15k over asking for the right house that I would stay in a long time.

I need more context here—what is the % above the asking price? We bought a property about 8 years ago at 1.5% above the asking price, but I LOVED it and we knew that we were overpaying. (But the house has since gone up in value 29%—not that this does me any good—I can’t sell the house because I need to live there and won’t be selling it!)

I offered 7% above asking for the house I wanted 2 years ago - downsizing, proceeds of previous house sale in the bank, sick of being outbid at 'best and final'. Cash buyers everywhere (coastal town). I wanted to offer enough to stop it going to 'best and final', and it worked.

It may be that I could have got it for a bit less - but it was a risk I didn't want to take.

What I'm a bit guilty about, is potentially contributing to an escalation in house prices here - downsizers inadvertently do that - but if it hadn't have been me, it would have been someone else!

We are using the same estate agents so I know they tend to market at the lower end of the scale to generate a lot of interest in the hope there’s a bit of a bidding war to drive the price up. The other properties on the road tend to be a 3/4 bed but this is 5 so I think it’s been difficult to bench mark against others on the street

That's small money when you are talking about buying a home OP. People seem to be obsessed about "adding value".

It’s an excellent point regarding what the mortgage lender would value the property at. I’ll have to check with them.

Our house has just gone on the market but it’s in a really sought out area and we’ve got confirmed viewings for this week. The house we have put an offer in for the family are moving out of area so I think they’ll be wanting to wait until the end of school year, but I’ll confirm with our agents as this may put them off people that want to move asap. Or I could be completely wrong!

I think you just need to think very carefully about what’s affordable and what you’re prepared to go to. When we bought the market for what we wanted in our area was insane- one place we looked at had 17 asking price offers in one day, and went for £90k over asking. We saw five houses that went to best and final offers, and three appeared back on the market within a few months- probably because the buyers couldn’t get a mortgage or realised they were never going to get their money back.

Are you in a good position to put yourself forward as a viable proposition and a buyer the agent and seller would view with favour? You could talk to the estate agent making sure they know of your keen interest and showing yourself as a buyer of serious intent trying to gauge what would be needed to secure the property.

Having sounded out the agent as to what the seller would or wouldn't be likely to accept and probed - 'Would I need to up my offer of 5 over? would 10 do it? 15...?' - to get a hint or a steer as to where the level of overpayment to secure it broadly lies, if you are seriously prepared to pay the 15, 20 etc over, you could seize the initiative and put that forward on condition that it is then yours and closed to other bids.

If you are only just on the market I wouldn’t be taking your offer seriously at all to be honest. You have no idea what you are going to get for your property, so aren’t really in a position to know what you can offer for the next one.

I think that’s a good point, unfortunately. If they’re going to best and final they’re very likely to consider chain-free buyers only. Even that’s not all that much of an advantage- we were chain free and lost out because the competition was a cash buyer.

We offered way over at the height of the market a couple of years ago. We definitely significantly overpaid but it's the perfect house for us
Everything was best and final offers and we'd missed out on a couple already.
We justified it by saying to ourselves if it went for £5k than our offer would we wished we offered more?