First offer as a FTB

[MotherHubba]

Hey all,

I'm a FTB - saw a property in London yesterday and loved it, now want to make an offer. My understanding is that houses in the area sell within a week or two and the EA advised me to get in there fast (by Monday) - he also said, and I don't know if this is BS, that they have already had two asking price offers from buyers in a chain. I'm not in a chain which he said would make me more attractive and would make them consider offering it to me at below asking price.

For context, the property was put up before xmas at 500k, chain fell through and was de-listed for sale. Now up for 525k. I was planning to initially offer 500 but can go up to 515. EA told me to write up proportion of deposit vs. mortgage in my offer email.

Is this ok please? I put a draft of it on MSE and got absolutely SLATED...

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Hi [EA],

Thanks for showing me round the [ ] property on Saturday.

I would like to make an offer of £500k on the property and would be able to proceed with this ASAP. As discussed on the weekend, I’m a first time buyer and not part of a chain, so would be able to move at the sellers’ pace.

I have an 85% cash deposit available for this and a mortgage in principle available for the remainder (able to forward through supporting documentation of this). I have instructed solicitors to act on my behalf who are able to proceed ASAP.

Kind regards,

MotherHubba

Why don't you just ring the EA to make an offer? You don't need to write to them.

Do not tell anyone other than your own solicitor and the mortgage company how big your deposit it - an EA wants to screw as much as possible out of potential buyers because they work for the seller and their commission is based on the sale price - by telling them you have 85% of what you are offering as cash (which is unusual, but means you can afford to borrow more) you are leaving yourself wide open to them trying to get you to increase your offer.

Keep it simple, state you are a FTB and have a MIP. It would be very naive to reveal that you could offer more. The EA is exploiting your naivete imo.

Thank you.

I was specifically told to email about this on the weekend - but good points.

My concern is that my offer is rejected if there are other people offering asking price.

So when you speak to the EA you state your offer is X and you are not in a chain, have MIP and ask when you can expect to hear back from them with the sellers' response. Depending on what that is then you can think about how best to make an increased offer, if you need to.

If they ask you to restate your offer in writing then put just that in a email, don't go adding more information about your finances.

Advice you got on MSE is spot on. This is a business transaction so you should only mention facts that are relevant, be concise and business like. Your offer (just the number), no chain, FTB, MIP are all relevant things. If you have a solicitor lined up, that's also relevant. If you don't get it done ASAP. LTV is none of their business.

MSE is correct. The agent doesn’t care, and won’t pass anything on other than the figure and position. They don’t give a crap if you’re going to burn it down or rent it out as a brothel, they’re only after commission and you don’t need to butter them up.

I’d call tomorrow, state your offer and that you’re all sorted with finances and a solicitor and ready to go. If they reject you can up the offer. Also I would be wary of them bullying you if they know the cash part is so high. Have a ceiling price and do not go past it no matter what they say!

Great feedback, thank you.

Have also discussed with my ddad who is pretty clued up and has offered take a look round. I've emailed the EAs asking to book in a second viewing early next week having not yet stated that I'm willing to make an offer.

Following second viewing, will then make the offer.

How do I get solicitors sorted in the meantime please? Does it cost and can anyone recommend any good London-based ones?

I found my solicitor after asking on a local Facebook Mums page, do you have similar? Lots of actual recommendations, then email in and ask for a quote based on your expected purchase price. You are then ready to instruct one as soon as your offer is accepted. Good luck!

I agree just ring up and say X offer, you are chain free and have a mortgage offer solicitor and deposit in place and happy to proceed.

Just beware - my sister’s house in London in the same price range sold on the first viewing, at asking price, same day it went on the market. Yes, there is a benefit to not being in a chain, but I wouldn’t say it’s £25k worth of benefit so if there are two asking prices offer (that is an if, but given the market in London highly likely), I think that offering £25k below that is very optimistic. Totally depends on how much you want that house or whether you’re willing to wait for something else to come up.

If they have two offers on the table they may not hang around for you to make a second viewing so I would personally be clear that you are planning to make an offer depending on the second viewing.

How would you advise I proceed?

I really want the house.

I can go up to 515 - do I do that now? Especially if they have two other offers supposedly on the table.

Do I follow up my email re. the second viewing with an offer, so that it gets to them by tomorrow?

The estate agents are allowing the viewing so nothing has been agreed with the other buyers.

Also they increased the price from just weeks ago, so your offer is acceptable.

Further they lost one sale due to a chain, if they’ve found their ideal house they may not want to risk losing it and will need a proceed-able offer pretty quick.

You may be their ideal candidate.

Offer £500 after the second viewing and see where it takes you. The offers might not be genuine or proceedable -

I also don’t understand why they upped the price by 25k in the 8 weeks since a sale fell through. Have you asked about that? Seems a bit odd unless they were overwhelmed with interest last time and decided they could get higher.

Looking at other places on the market, I think they may have been overwhelmed with interest and seeing if they could go higher.

Im nervous that as all Ive said is about booking a second viewing, they will just pick one of the other offers. Do I follow up and say I'd like to make an offer on the back of it? Or sit tight?

You can make an offer before the second viewing. Ask your DDad!

I suspect, like my sister, they sold extremely quickly and had a lot of interest, so felt they’d underpriced (and were right, if they have had two asking price offers).

If it were me, I’d make an offer at £512k contingent on second viewing, and if they turned that down I’d make a beat and final offer of £515k. As their last sale fell through they may strongly value chain free status, but I think even then, £25k is a lot of value to place on it.

Definitely do not tell them you have an 85% deposit as they will push you for more, believing that you could easily borrow another £10k to get to the asking price. That may not be true of course, but that’s what they’ll believe.

If you didn’t have your heart set on it, I’d suggest going in at £500k, but if it were me and the house of my dreams, I’d be worried about missing out on it when I could have afforded more.

Totally up to you though! On the other hand, you can always increase the offer and, as long as you do so quickly once refused, you may be okay. If I were selling and had a good prosepective buyer and other offers, I’d wait until I had best and final offers from all before making a decision. They may be under serious time pressure though (I was staggered by how fast my sisters went through, so much pressure on the whole chain to move fast)