Advertised sale price is actually a 'start your bids here'price - is this this normal?

[eastwest]

So, I'm just curious really because I have lived in this not-terribly-glam city for most of my life, and this is a new turn of events, which I'd previously only associated with London/ the in-demand bits of the south.

We are trying to buy a property. We are in a good position, can afford it. However, the area we are trying to buy in appears to be incredibly popular (for good reason - schools, etc.). What typically happens: We see house advertised for sale, at e.g. £200,000. We go and look at it, usually there are 5 other people looking at the same time as us, there are also other viewings in the week so I'd probably estimate about 10, 15 people view it. We put in an offer at the asking price or slightly above. We find out a couple days later by ringing up the estate agent that the house has gone (typically in 7 days) for 'way over the asking price.' - we have not been asked to up our offer. These are advertised asking prices, not O.I.R.O.

So I'm feeling honestly kind of confused - it is like a blind auction (if that's the term I mean!). We don't know how much we need to offer to beat other offers. Which I guess is meant to push us to offer as high as possible...? is that an estate agent strategy? Does this happen everywhere and all the time? How do you find out how much you have to offer?

Yes, it's a strategy - I doubt that prices are going "way over" if there is a reasonable supply of property in the area. The only way you can find what the price has sold for is to wait for the Land Reg to publish prices but this typically happens about 6-8 months after the original offer went in so it's very difficult to gauge at the time. However, if prices are going for significantly over asking price, then estate agents will start revising asking prices upwards before you get to that stage.

The only way I can think of that you can try to counter it is to brown nose to estate agents - let them know how disappointed you were to miss such and such a house, how you are all teed up and ready to go (make sure you are) and hope that you'll be at the top of their phone list when a new house comes on the market. It's grim.

If 15 people have viewed, and say 5 people have offered - they probably just engage the top 2 or 3 bidders in a 'best and final offers' process.

If I knew 15 people were looking around a house I wanted in a popular area then I'd probably go straight in with my best offer.

You've confirmed my suspicions, thanks! It is indeed grim.

i am facing the same problem since i started house hunting 1.5 month back.
i have been outbid twice when i offered 20-25k above asking price.

Property prices are going mental and there is no real indicator as to what you should bid and of course the agents are not helping at all.

i usually look at last sold prices in same area and then view the house and account for extras or work needed, that seems to work as i was the 2nd highest bidder on both occasions. so at least the valuation was somewhat fine.

but nowadays they do 30+ viewings in 2 hrs and then make people fight over the property and in the end its a win-win result for the vendor and agent.

very difficult to buy a house at sensible prices nowadays specially in london and surrounding areas.

already feeling so grumpy and fed with after spending last 4-5 saturdays viewing properties and then crazy bidding wars on following monday/tuesdays.

Bought a house in Cambridge this year. 2 days of block viewing. 3 of us wanted it. We paid £30k over the asking price but were chain free so a better chain for the sellers.

Kept thinking it would fall through but all the houses coming on the market at that time for a similar size/some smaller or similar state of decor or a lot skankier were going for £50 to £150k more than we paid. I was so scared it would fall through but all was well in the end.

If you can meet the sellers I think that helps (the owner hoped we would be the best offer!) Make sure you let them know your circumstances, that you can fit in with their plans etc if it helps your case especially when they may get multiple offers.

I think it's becoming more of a problem. I recently sold a house (oop North) for over the asking price within two days of it being on the market. We had a bidding war by lunch time the first day. The estate agents had mentioned it was a good possibility when valuing it and said it was becoming more common with some houses. Other houses in the same town though still seem to sit on the market for ages.

Yes, this all sounds really familiar.
Two streets away, in a different school catchment area, it's a totally different story.
There is also a house in the 'hot' area which is overpriced IMO at £280,000 (3 bed mid-terrace where one bed is the converted loft - not in London or south-east) which has been sitting on thr market for a few months. So I think there is a ceiling - it's just working out where the ceiling is.
I also think things will change after April because I know a lot of these have been bought by btl investors (house we saw most recently fell through because the buyers wanted to extend for rental purposes, but it didn't make financial sense) since we saw them up for rent a few weeks later.
We happen to be renting in the same area we would like to buy in (have been for some years) and now I wonder if we should just stick it out renting until next academic year when DC will be in school and secure of his place, and then buy in a less pressurised area.

Estate agents can't 'make' people fight over a house. At the moment there are simply not enough properties coming on to the market, so when a new one does there's a long list of people wanting to view. Estate agents also don't just approach a few people to give best and final offers, a date is set and anyone interested can put in a bid. We actually prefer not to do it but when there are lots of people interested it is the only way.

I wouldn't approach the Vendor and try to persuade them as more often than not it actually goes against you as it makes the Vendor feel awkward and manipulated. The best offers aren't always about money, position is important too as is having your finances all ready to go. In this market if you find a property that you think is 'the one' then work out how much you are prepared to pay for it and offer that amount. It is a sellers market at t he moment I'm afraid.

That's what makes me think that people have been offering high right from the outset - we're not getting those 'best and final by Friday 4 pm' type calls. Last house, we offered £5K over the asking price, waited, heard nothing back, rang up, were told "it has already had sale agreed, for way over asking price."

I don't think it's a 'strategy'. It's not as if they are asking you to make a higher bid- the fact the EA is just not interested in persuing your bid or even calling you back suggests you're not even close to being in the running for these properties.

If the EA's were coming back saying 'we've had a higher offer and need your best bid' then I agree it's a strategy but it sounds like you're just the victim of supply and demand.

There's even less properties on the market than usual at this time of year and if you're looking in a popular area then I think you have to accept you are going to get less house for your money.

Maybe try looking in a slightly lower price bracket then having more 'wiggle room' for offers over.

In the same boat. We've put over 10 offers in, all of them above asking price.

Outbid by motherfucking BTL syndicates 8 times. The other two times it went to other people.

I also wouldn't pin your hopes on the BTL market cooling in April. I fear all the changes will do is push up rent prices, not cool purchase prices.

An increase in stamp duty is a one off expense which is pretty quickly recovered by higher rental income. As long as there are people who can't afford to buy but want to live in these areas, BTL investors will continue to snap up properties- plus they'll buy all they can between now and then which, in itself will push up prices.

Yes it's absolutely normal - this is the way houses have been priced/sold in Scotland for ever. Normally houses go for anything up to 10 - 20% over the asking price

People who've been looking for a while are offering high from the off when they find a property they love, that shouldn't mean that you're not kept informed by the EA though.

It might be different next year, you just can't predict it.

At least in Scotland it's sealed bids. You don't get caught up in a bidding war.

People who've been looking for a while are offering high from the off when they find a property they love,

That's what happened to us. We've been looking for around 9 months, and then this house came up, and soon as we've walked in we knew it was the one. It went to sealed bids, over 20 viewing, 7 offers, and we won it with an offer 20K over asking price. We just didn't want to lose, as we knew after 9 months, the chances of us finding another house me and DH liked so much (I wouldn't comprise on a south or west facing garden, and DH wanted a v. quiet road...and this house had both, plus the space we were looking for) was very slim, so we offered our best. Hopefully we'll be completing before Christmas.