Bidding war on a house

[Rottie454]

Hi,

Me and my partner put in offer price on a house and the next person to view it did the same. I've since had a phone call telling me that they are asking for everyone's final bid for the property and the highest bid wins. We absolutely love the house and haven't seen anything that has compared but we're scared we might loose it. It's up for 195k and we were going to offer £210. Does anyone think this is too much or not enough?

Many thanks

I don't think there is anyway of advising you. I am familiar with this situation as I have a family member who is an estate agent.

Very dependent on the house, area, 'uniqueness' (and therefore other people interested in it) and also how much needs to be spent on it against its potential value.

I think, all you can do is work out what you can afford including any money to be spent on it and combine this with 'what is it worth to you' - it maybe close to the kids school, one of a kind, have a large garage....whatever is relevant to your needs.

However in a similar vain you have no idea of any of the above from any other prospective buyers.

If the winning bid is going to be purely on highest bid (sometimes buyers position is taken into account - cash buyer, first time buyer etc) then a 'trick' of the trade is to offer an 'odd' amount - so rather than the rounded £210,000 - £210, 825 - you may just 'pip' another buyer to the post!

Good luck ( but to protect yourself don't get too attached!)

Have you got a big deposit because the surveyor may value lower than what you offer

@PippaPenny I never understand that odd number trick because what seller wouldn't look at a cash buyer who offered 210 vs a person with a long chain who offered 210,250 and go for person B?

@Plural, yes I think usual sealed bids do take account of the buyers position as I said above. Cash, no chain, a quick and more certain sale do usually influence and in that case the 'highest bidder' in terms of price doesn't necessarily get to buy the house.

@Rottie454, you did say that once I the sealed bids are made 'the highest bidder wins' so if that is the case buyers often offer a round number and can be pipped by as little as a couple of hundred pounds.

Sealed bids saves a bidding war returning repeatedly from propective buyer to prospective buyer. Often buyers will walk away from such an arrangement and refuse to get involved.

I’d stress what a PP said about a deposit. If you offer high above asking it could very well be devalued.

I agree with lastqueenofscotland. If you put a high bid be aware the bank will take into consideration only how much they think the value of the house is and you'll end up forking extra for the deposit (it happened to us but we were aware of it and were prepared). Or end up with a worse interest rate if you don't have the extra funds to make up the deposit.

That's what I'm worried about to, the mortgage lender not valuing it the same. We only have a 5% deposit and couldn't get anymore if needed. If the mortgage did value it lower is there a chance we could see if the vendor would take less money for it?

Yes, they do take account of position.

We bid the same as another person, but they were chain free and got it.

I'm afraid that is why it is not always the highest offer which 'wins' in these situations. The vendor should be advised to go with the best offer, which may not be the most money.

Unfortunately I've been told there's a few people in the same position as us with nothing to sell and have an agreement in principle. So based on that I would assume they would then go for the highest. Other houses on the same road have sold for 50k more but in better condition and modernised

And its through a solicitors as the vendors have passed away

The solicitors will be acting for the executors. I do not think you can go back to the vendor and ask for a reduction because you cannot get the mortgage. However if people are so keen to get the house, it seems like the value you and other purchasers are looking at would seem reasonable. It probably will not be down valued. If it is, you will have to pull out. Don’t forget other purchasers might be builders. They are seeing value, as you are. Therefore put the bid in. If it doesn’t work out, so be it. You clearly have no money to refurbish it though (if you have no bigger deposit than 5% which is very little) so can you really do this project anyway?

BubblesBuddy thanks, we'll have to put the bid in and hope for the best. And even if we do get it be prepared that the mortgage company might not agree. We don't have money at the moment but we have a lot of spare income a month. The house is perfectly livable it just need modernising and we're happy to spend the next few years doing it up

@Rottie454, it seems therefore your total offer has a maximum based on your 5% deposit.
It maybe that other prospective purchasers have a larger deposit so can offer more. It may also be that there are others who have the whole amount in cash so no mortgage needed. The consideration of the bids will take this into account in most cases.

I think you are going to have to hope that other bids are not cash and not with large deposits tbh.

How soon will you find out if it's your's or not?

How long has the house been on the market for?

We were in this situation and were asked what our deposit actually was - think they were basing the offer they agreed to off the highest deposit.

I'm guessing this was a factor as it had came back on the market after having been devalued.

Do your homework, zoopla, right move sold prices and try to work out what has moved recently.

I would also suggest popping a copy of your sealed bid through the letterbox as I am aware some estate agents are far from ethical and will submit the bids that they want to win or will benefit from most.

We lost out on a house through best and final and it transpired through a friend that our offer was never submitted to the vendor and was the highest bid/and we were in a favorable position to proceed.

pippapenny we will find out next week, I'm hoping Tuesday as can't wait any longer!

cheeseislife the house came on the market on the 16th. It has had countless viewings and offers so makes me think it was priced low

We have looked on Zoopla and other houses on the road have sold for 50k just modernised. Although ours has a garage which some others don't

seastargirl that's awful! Did you say anything to the estate agents? It's worrying that something like that could happen

It's not worth saying anything, we don't plan to leave the area and wouldn't want to be blacklisted by the most influential agents on the market as you don't know how high up the issue goes, we've just made sure that we're better equipped to play the game if we move again.

In the end we were glad we didn't get it, we'd overbid (out of desperation) that property has had some serious issues since and we got a house that is so much better for us. We found it by writing to houses in the area that we liked and bought it off an elderly lady who doesn't trust estate agents so was waiting for a family to approach her as it's happened over the years. So it all turned out for the best! But I still like the warn others as I imagine this could happen elsewhere.

The last 2 houses we sold went to sealed bids. We didn’t take the highest offer in the last case, as a lower bid was cash. Also, I thought that the higher bid was well over the actual value of the property and that the buyer would struggle with getting the mortgage valuation near that price.

It is worth drafting a letter outlining your position. I would also do research on solicitors etc and have your print out of your mortgage in principle and proof of deposit. These will all help to show that you’re a serious buyer. Good luck!

As an aside, a close friend has just offered over the odds on a house he fell in love with. They’ve since uncovered a lot of big issues in the survey, which they couldn’t now fix and they’re now in a really tricky situation of renegotiating. Don’t let your heart overrule your head!