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Original poster

Tips for winning bidding war

23 replies

Serenitysutton · 29/12/2013 12:09

We found a house a few weeks ago we bid on. We were not he highest bid, but we were told what was. We can pay that. We are all getting a "second" round because due to an admin error the house wasn't able to be sold a few weeks ago. The admin issue should be rectified in a couple of weeks and we will be contacted for a second round. Seller will accept best offer which will be a combination of price and position.

Does anyone have any tips to give us the best possible chance? We can meet the current highest bid and I thought we would add say +£1,750 on top to make an odd number. We are ready to go ( in rented) but need a mortgage - broker won't do application until an offer has been accepted.

I know at least 1 investor is involved, so potentially cash.

Any ideas appreciated!

OP posts:

jchocchip · 29/12/2013 12:11

Walk away. This is how a boom happens. It will crash. Property is cyclical. Buy at the bottom, sell at the top...

Original poster

Serenitysutton · 29/12/2013 12:34

it's not overpriced at the highest offer- it's still at the bottom. And we have to live somewhere, there hasn't been a bottom for a very very long time where we live !

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HaveToWearHeels · 29/12/2013 12:51

You are in a good position if in rented, and it is not necessarily any quicker process with a cash buyer but not everyone see's it like that. I think your strategy is good however the last highest bidder could also be upping their offer.

If you are planning on this house being your home, and you can afford the mortgage payments then it really doesn't matter what you pay for it.
No one can predict the future of property prices.

Original poster

Serenitysutton · 29/12/2013 12:56

Thanks have to wear. I thought I'd also ask the Estate agent to confirm we are the highest offer- I'm not sure I trust them but at the same time they're the only source of info and I actually dont think they'd lie really. They'll sell it anyway .

We sold our house to a Cash buyer and it still took 3 months- granted a month of that was legal problems down to our side, but you never know do you?

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Bowlersarm · 29/12/2013 12:57

No tips except to not go higher than you can afford. And yes to an odd figure.

A cash purchaser would get it over a purchaser needing a mortgage though, unless you've met the seller and they have fallen in love with your family and can see you living in their much loved home

NatashaBee · 29/12/2013 13:07

This reply has been deleted

Message withdrawn at poster's request.

WhatKatyDidnt · 29/12/2013 14:23

I second Natasha - get a mortgage agreement in principle and send to the agent along with your offer. (You can obtain this by going through your details over the phone with, say, HSBC.) You don't have to actually use it but good to show the vendors that you are able to borrow what you need.

My other advice is to offer the max you think it's worth to you. I've been in your situation and analysed the numbers to death and offered accordingly. But in my heart I knew it was worth more (it just had that special something extra) and it was sold to someone else who offered a few grand more.

Unexpected · 29/12/2013 14:38

I think you will need to add quite a bit more than £1750 to the current highest bid to be in with a chance. Unless the current highest bidders are right at the top of their possible offer, they will surely add on e.g. £5k more to ensure they are still top? (Disclaimer: as we don't know the selling price of the house currently £1750 may represent quite a rise in offer - or it may be a drop in the ocean of a £1m house). If the house is still at the bottom of its potential value for the area even at its current highest bid, be prepared for it to go a lot higher and for the second round to turn into a third or fourth round.

Unless you really love this house and truly think it is worth quite a bit more than current offers, I would walk away now.

Original poster

Serenitysutton · 29/12/2013 15:56

Thanks all- unexpected current highest bidders may or may not increase their current offer, but I agree- am prob prepared to go £8k above the current highest at a push but that is def my walk away price. Food for thought!

I have a offer in principle which I can send to EA but they're not really worth anything are they? They haven't credit checked you or anything, they give them
To anyone. Although it would at least prove we are capable of borrowing the amount needed to buy it.

OP posts:

NatashaBee · 29/12/2013 15:58

This reply has been deleted

Message withdrawn at poster's request.

Original poster

Serenitysutton · 29/12/2013 16:02

I should also mention we've not been asked to go to a second round to increase bids per sae- the house needs to go through probate before anyone can buy it. So "round 2" is just a are you still interested, do you want to change your offer? Situation rather than a bid up everyone! Situation. About. 7 of us offered on it in the 8 hours it was on the market- they took it off as soon as they realised it couldn't be sold- so they'll come back to us 7 or so when it's complete. It's a lucky situation because we now get a Second stab!

Being sold by the solicitor so I doubt s/he cares who buys it or has much interest in really bidding it up, although obv wants best price/ fastest sale combination.

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Original poster

Serenitysutton · 29/12/2013 16:03

You're right it is better than nothing - I already have one so it's no problem at all to pass it over.

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Mandy21 · 29/12/2013 18:20

When we were in a similar position, we made much of our position (in rented), would ensure the legal side went smoothly (husband's colleague did conveyancing), could work to their timescales. Also bid an odd number. We also put in the letter that we wanted it as a family house. Good luck.

Original poster

Serenitysutton · 29/12/2013 18:34

Brilliant thank you- we have a solicitor ready to go who is very good so I will be sure to mention that. I will also mention it's to be a family home in case it curries favour with the estate agent / solicitor!

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HomeIsWhereTheGinIs · 29/12/2013 18:39

My concern with this situation is your broker. Go directly to a bank or find another one. I move every year (we renovate properties) and I wouldn't accept anyone without an agreement in principle in place, even if they were the highest bidder. Get something more concrete or you may lose out.

Original poster

Serenitysutton · 29/12/2013 20:31

But a bank won't do an application until you've found a property either would they? It would be a waste of everyone's time and leave a print on my credit file. The broker is London & country who have come highly recommended but before them my other broker wouldn't do an application until an offer had been accepted so I don't see how you can get around it. What would you expect to see?
Thanks for the reply

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Original poster

Serenitysutton · 29/12/2013 20:32

I've just checked and they've given me a decision in principle...

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HomeIsWhereTheGinIs · 29/12/2013 23:47

As long as it's from a named lender, you should be fine. It just shows commitment - and a sizeable number of people get turned down for the decision in principle so it shows that you don't have serious previous issues and that you earn enough to afford the house. If I really loved a house, I'd do everything humanly possible to convince the vendor I was serious and could proceed. Good luck!

Tyranasaurus · 30/12/2013 10:03

Both houses I've bought have gone to highest bids.

The first I bid what I thought it was worth and didn't get the house. However whomever outbid me had overbid- realised this when they had the mortgage valuation and dropped out, so after a small delay I ended up buying it for what I wanted to pay all along.

The second time there were 3 bids at asking price but we were the only people with nothing to sell and we were porting a mortgage- so no mortgage app needed.

So, um, bid what you honestly think it's worth and make teh most of your position.

didireallysaythat · 30/12/2013 10:46

The houses we lost out on with sealed bids went to cash buyers in rented or builders, twice for less than our offer. We sold up and moved into rented to level the playing field. It takes 10 mins to appoint a solicitor and 1-2 hours on the phone to apply for a mortgage so I don't think having them in place makes much difference. Understanding what the seller wants (£, quick sale, selling to local family etc) may help. Top tip: don't move in in your head ! I did...

HomeIsWhereTheGinIs · 30/12/2013 11:45

didireallysaythat I agree that it doesn't take long to do those things - but then all the more reason that I wouldn't touch a buyer that hasn't bothered with a barge pole. I've accepted a buyer in the past, only to be strung along whilst they desperately try every lender in the market and eventually admit that a bad credit history means nobody wants them. Now we want them to have a solicitor instructed, an aip in place and they get a maximum of ten days to get the survey done. If that doesn't happen, we go back on the market. But then this is SW London so the market can be brutal. Maybe it's calmer where you are?

Unexpected · 30/12/2013 11:57

I agree that is only takes a short time to appoint a solicitor but just because it is possible to do so, doesn't mean that potential buyers will do so. It's equally entirely possible to waste lots of time deciding which solicitor to use or just not to bother appointing one for days after an offer has been accepted. Not having in place something which is so straightforward to arrange before making an offer would make me far less likely to accept such an offer. If a buyer can't get themselves together on something that simple, how long is the actual exchange/completion process going to take?!

Mandy21 · 30/12/2013 12:56

The solicitor point for us was that my H's colleague did it - it wasnt necessarily about having one in place at the time if the bid (although we did) it was the fact that my H could keep on top of the conveyancing throughout the transaction (via his colleague) to ensure there were no delays etc.

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