Help. Think we've offered too much for a house. Should we gazunder?

[RobinsonOnTheA24]

Clueless first time buyers here. Been looking for a house for a while, not finding much on the market, but found one that we liked last week which seemed to be a good price, viewed it on Saturday and we offered the asking price (£280k) straight away. Agent called Sat afternoon and said the buyers were very pleased and had provisionally accepted. Another buyer had made a matching offer but as they were in a chain and we weren't the vendors were inclined to go with us. However, as they hadn't had feedback from all the viewings they would call to confirm on Monday (today).

Got a call from the agent this morning to say that someone else had made an offer over the asking price, so they were now asking for our best and final offers. Spoke to them again this afternoon and they said that a third buyer had offered cash over the asking price and had "come in strong" (whatever that means). So after a brief conversation over the phone with dp we offered £286k, based on the fact that this is the absolute maximum we are likely to be able to pull together, including help from family and friends, but leaving no money to do any work on the house

Agent called back about an hour later to say they had accepted our offer, and now I'm panicking, thinking that perhaps it was completely crazy to offer £6k over asking, and also feeling depressed that we won't be able to do the work we had wanted to do on it.

It may all be taken out of our hands when we hear back from our mortgage advisor anyway, but if not, wwyd?

Am v embarrassed to be telling this tale of ineptitude, but would be very grateful for any advice.

If you really are one of three then you won't get it if you drop your price. Do you want the house?

I always think in ten years time if you lived there would you still be fretting about that six grand?
In six months time if you still haven't found anywhere as nice to buy will you be kicking yourself?

Or you could consider that the agent has lied to you :(

Is it really worth leaving yourself with no spare cash?

Its a buyers market after all and they might have thought you have money to burn and decided to push you into offering more

I would expect that you will be knocking something off the price as the negotiation continues to be honest. Especially when the survey comes back.

It is unusual to get a house which gets so much early interest, so it may well be that the initial asking price was too low. Then again is there is little on the market it can be hard to price it.

Thanks everyone. Not really a buyers' market around here - great shortage of 3 bed houses here and things seem to be going very quickly. However, I do wonder if the agent was a little economical with the truth having gathered that we were both keen on the house and very naive. I doubt they will have thought we had money to burn, but I did feel I was being pushed.

My feeling was that the asking price was quite low but I'm no expert (clearly). We had offered £5k below on another house about 10 mins walk away (£285k on asking price of £290 - bigger garden and 3rd bed, and less work needed) and been refused, and it seems as though a lot of houses in this price bracket are going under offer within a week or so of being advertised.

Interesting about knocking something off the price as the negotiations continue. So we won't necessarily be scum of the earth if this happens? (Have just read the gazundering thread on here.) Presumably the lender's valuation would potentially be quite a key factor in this?

If you were to reduce (or withdraw completely) your offer now that wouldn't be a huge deal and I wouldn't consider it gazundering although it obviously might make you look bit unreliable so would be annoying and offputting to the seller.

If the survey comes back with unexpected problems (eg. Woodworm) then it is perfectly reasonable to reduce or withdraw your offer. However if the survey raises something you knew about already (eg. Decorative condition, lack of central.heating) then it is not reasonable to adjust your offer.

However the most unethical scenario would be to reduce your offer cynically.at the last moment just because you hold all the cards. By this point the seller has invested a lot of time and money in the process.

This is a very long-winded way of saying yanbu to withdraw your offer now if you really feel that's the best thing for you and are prepared to possibly lose the house as a result,but don't delay!

(Ps. We paid £5k above asking price for our house 5 years ago and have never regretted it. Putting aside the issue of whether you trust the agent, do you feel it's a fair price?)

Thanks armed, yes we really don't want to look flaky and unreliable: apart from anything else if we don't get this house we will be looking for something similar and there are only three agents in the area. We certainly have no intention of doing something sneaky at the last minute. My gut feeling is that £280 is a good price, £283-£284/£285 would be a fair price, and £286 is a bit of a mistake and a result of us not knowing how to play the game. But I don't really know. Anyway, will see what mortgage people say tomorrow.

If £285 is fair then so is £286 tbh - £1000 is small change in house buying and presumably would add a barely noticeable amount to your monthly mortgage payments.

Reducing your offer by £1000 (or £5000 even) would not suddenly give you £1000 extra cash to spend on the house. Sorry if I'm stating the blooming obvious!

The main thing here is "how much do you want the house", and also "can you afford the higher price"? If the house is absolutely the one for you, and you can manage the finances then I would stop worrying about it.

I don't know, armed. We are pretty much at the limits of what we can borrow and were hoping to reserve some cash to sort out the kitchen. Never having done this before I'm finding it hard to get my head round the idea of £6,000 being a small amount of money in the scheme of things.

I'm not sure whether it's absolutely the house for us but it is pretty good in lots of ways. (Obv. we'd need another £50k for the house that's absolutely for us, and that's not going to happen...)

From what you've said about other houses in your area then the price sounds reasonable.

If you can't afford it, now is the time to back out.

It shouldn't cause too many problems at this stage.

What Armed said. You're not going to reserve significantly less cash at £286k than you are at £280k. In order to reserve (say) £6k from the pot to spend on a kitchen you'd probably have to reduce your office by £30k odd, wouldn't you (depending on your deposit %).

So the doing up the kitchen is a red herring, you've either got significantly more cash than you need to spend on deposit/fees/stamp duty or you haven't.

Your calculations about whether you can afford it should be based on whether you like it, whether you think it's worth it (tricky and subjective, it's hard for us to say without knowing area etc), whether you can get the mortgage, whether you can make the monthly payment.

(Also, we have backed out of a house 2 days after offer acceptance, partly because we felt we were paying too much. Agent was briefly gutted, but nobody had spent any money, so it wasn't a big deal. And our instinct was right because that house is still on and reduced.)

I'm not sure I'd call it gazundering at this very, very early stage, however with three buyers offering asking / over asking and on such a very small percentage increase (you're only 2% over asking) you haven't offered "too much" for the house's value. If however you have offered too much for your own finances, walk NOW before you waste money on solicitors, surveyors, mortgage fees and annoy the hell out of the vendor. They've got alternatives banging on their door to get their house so if you don't want it, let them get on with selling to someone else.
If you do want it, don't think you're overpaying simply because you've paid in excess of the initial askign price. A house is worth what someone is prepared to pay, and a lot of people are prepared to pay very close to what you've offered.

Please dont carry on and then at the 11th hour demand they drop the price by 6K.

call the agent and just clarify that your offer of £286 still stands but this will have to be subject to mortgage approval which was previously assured to £280.

This will give you a bit of breathing space where you can have a little time to think.

I also agree that backing out at this stage will not be a problem.

I'd say that any offer made at the beginning is made "subject to survey". When the survey comes back, get the surveyor to talk you through it & obtain prices for what any work would cost & negotiate the price down based on that. If you've reconside

If you now consider 280k to be too much (i.e even if you could negotiate down from 286k), then save the cost of the survey & withdraw.

The earlier any withdrawal is done the better, gazundering is offering a lower price once all contracts etc have been signed agreeing the higher price; there's still some way to go until that point!

I don't really understand that £6000/£30,000 thing, madbus. We're expecting to be able to borrow £210k (according to our Decision in Principle), and have £76k available for everything else (plus fees), so will now be spending all of that on the deposit rather than keeping back the £6k. Unless a lender is likely to lend us more because of the extra £6k on the price?

Anyway, all depends on what mortgage broker comes back with today.

"Please dont carry on and then at the 11th hour demand they drop the price by 6K."

Where's all this coming from? I suppose i did put the word gazunder in the title. But just to clarify once again, we're really not contemplating doing anything like that.

and we don't consider £280k to be too much - as I said before, i think that is a good price that we were very happy with. i just feel as though we've been bamboozled into offering more than we intended or needed to, and while we do still want the house, I'm regretting that.

If you think the estate agent has played you into offering more than you really needed to (and that's a possibility, though of course impossible to know for sure) and you really want to try and get the offer down again, you can do that IMO, but you have to be prepared to possibly loose the house in the process, if the other bidders are real and not heavily embroidered by the estate agent. It's a gamble.

Call and say you are excited about getting the offer accepted and that you have an appointment with your mortgage broker to explore the financial side, as original mortage was for 280. You can then call back and say it turns out that you can't stretch above 283 or whatever you want to actually pay and see what happens.

Now, I also have to say that I agree with previous posters that in the grand scheme of buying, a thousand here or there doesn't make a big difference. I also think you could add the extra cash you were planning on retaining to your desposit and take a somewhat larger mortgage overall to cover extra costs and the work in the kitchen. I wouldn't really advocate sinking every last penny into a mortgage though: you usually need a buffer, as there are often unexpected additional costs. Good luck!

I know it's really horrible to feel that you are being played by the estate agent but, if it's any comfort, we are selling a flat in a desirable area. We got an offer at asking price after a few days which we were happy to accept but before we could, 20 minutes later another one came in. The estate agent asked for best and finals - the first buyer obviously felt that he was being played and wouldn't up his offer (fair enough in the circumstances) the second buyer did add an extra #5k and since their circumstances were identical, we went with buyer 2. We then knocked #3k off after the survey came back so (a) you may not have been exploited (b) all is not lost.

Unfortunately that's just the way it goes. We ended up paying a few thousand more than i would have like but if we hadn't we wouldn't have got the house. It needs more work then others that had sold for the same price, but we needed to move to get our kids into school and the seller wouldn't sell for any less. I looked a while later and nothing else suitable has sold for less since so its lucky we got the one we did.

With buying a house you won't always get exactly what you want for exactly what you want to pay for it so you have to aim for near to that. A few percent over what you hoped to pay seems fine to me, unless its likely that another one will come up soon which you would be just as happy with.

The thing is, you had competition for this house and so you likely will for another one. If there is demand it drives the prices up. That's just the way it is.

Lalalonglegs. We had the same situation when we sold ours, several times over as it fell through a few times. Its very common op.

If you think it's going to eat at you, then call now and tell them you want to go back to 280. I wouldn't really call that gazundering at this stage.

As others have said, it's a small amount of money in the grand scheme of things, but I understand how you feel - I would be really annoyed at feeling pressured and hurried into paying more than I wanted to.

You might lose the house of course. Equally, they might go with another buyer and come back to you if that falls through (lots of chains are falling through at the moment, and as FTBs you are in a good position).