Advice for first time buyers possibly going into a closing date...WWYD?

[calialilly]

Hi everyone, I am looking for some advice that you would give to a young couple (first time buyers) buying a property/going into a closing date.

We viewed a house back at the beginning of March and put an offer in about 3 weeks later, which the first week of lockdown. The offer was well below the asking price and it was rejected (which we knew was going to happen) but thought we would offer it anyway due to the uncertainty of the whole lockdown situ.

There has been no contact between us and the EA since the offer was rejected as we assumed nothing would be happening due to COVID, however the house became available for online viewings.

Fast forward to today, we received a call this morning from the EA saying 2 other buyers are interested. In the last hour, the EA has just confirmed the closing date is Thursday 12pm.

Would you be skeptical about the other 2 buyers... could the EA be bluffing? . We are in Scotland and the EA's only opened back up yesterday, so the 2 other buyers would be putting on offer in based on online viewings!

At this point we have no idea what to offer based on what is going on with house prices as a result of COVID. The property ticks all boxes for us except one but this can be easily rectified.

It is on the market for o/o 190k, HR valued at 205k and the sellers* purchased it in 2018 for 180k.

We plan to sell after 3-4 years with the intent to buy DP's family home - which at the moment we cannot afford (and DP's parents not ready to sell). We are worried about buying this property, spending 30k+ to renovate for a new kitchen, bathroom and to re-decorate then in 4 years time when we try and sell we will be at a loss!

*Sellers are moving to Australia as both have jobs lined up. They put their house on the market a couple of weeks before lockdown but obviously due to travel restrictions they couldn't go anywhere so were possibly holding out for better offers. We have a feeling that they've been given the go ahead to travel and are now in a position where they would like to sell ASAP!

I am feeling particularly deflated as although we are in no rush to move (living in my family home as parents now live abroad) we would like somewhere of our own. I'm worried that properties will not come on the market due to falling house prices and wonder if we don't buy this house, how long will it be before we buy. Having said that, I am also worried about buying -on a whim- and seeing houses crop up over the next week and wishing we hadn't rushed into it!

Thank you for taking the time to read this very long post . WWYD? Any advice would be welcome and much appreciated.

• Would you wait to see what came up or would you offer?
• How much would you offer given the market today?

How much was the offer you made in March?

180k, the sellers probably thought we were time wasters as it is a slightly a 'cheeky' offer . It is what they paid 2 yrs ago but our solicitor compared the current listing to the listing from when they bought the property and found no difference with the exception of new flooring in the living room!

To be honest, we were hoping for a counter offer.

@apolloanddaphne - Sorry, I'm new to mumsnet and forgot to tag you. Not sure if you'll receive a notification about my previous response but hopefully this finds it's way to you. (If you get 2 notifications, sorry in advance!)

I'm not sure I'd be buying now at all if I knew I'd have to sell in 4 years time. House prices rise and fall but you'll only lose money if you can't sit tight and ride the falls out.

I know it's expensive but I'd stay in rented and save, if possible.

I don't think that was a cheeky offer at all. If you still want the house I would go in at 190k and no more. If there are others interested and they offer more then you keep looking.

@JudyGemstone Thanks for your reply. Perhaps 4 years is best case as DP's family house is eye wateringly expensive and out of our budget! However for us to be able to get that point I think we need to get on the ladder at some point. We thought this would be a good time as house prices might be low and once the market picks up we would be able to sell without a loss.

We are not in an immediate rush to buy as living rent free in my family home (parents live and work abroad) but would like to do so by the end of the year as DP is 28 in January and says he feels under pressure to buy!

@Apolloanddaphne Thank you, we were thinking about going in with an offer of around that value. We are seriously skeptical about offering any more than 190k as worried the EA is playing us and there is no other buyers!

Property is selling fast where I'm looking. Trying to second guess the market is a mugs game
If you like the house put in your best offer that you feel comfortable with. Or wait til Spring when things should have settled down (and risk prices going higher - market forces alone could account for an increase in price from two years ago, and of course a further increase).

This makes no sense. Why not stay as you are, save like mad and buy DP family home in 4 years?

If you're buying to make money right now- esp if you have to spend a bunch to make it liveable/enjoyable for you, you're on to loser in this climate

Sorry, but what you seem to be proposing really makes little sense. If you were going to spend £30k on a kitchen and sell in 4 years you are unlikely to get your money back.

As others suggest, you’d be better off as you are - rent and mortgage-free and able to save for a deposit.

In Scotland that was a cheeky offer if it was valued at 205 most properties prior to lockdown are going over value where I live. If your planning on moving in 4 years no point in spending 30k irrelevant of house prices/lockdown . You won’t get that back in 4 years and would be wasted money.

@Pipandmum. Thanks for your reply and advice. I think we going to put an offer in around the asking price and see what happens

@Takingontheworld We are really not keen to stay in my family home for much longer as we've been living here together for about 2 years already. Although I've said we are hoping to sell in 4 years I should have really said its not our final/forever home and truly depends on when we can afford/when DP's parents are happy to sell to us and downsize. At the moment they show no signs of selling up for at least, minimum 4 years. Our intention is not to make money (that would be a bonus), but we just don't want to be at a loss. The house is underpriced for the area as the sellers were looking for a quick sale due to jobs lined up at the end of summer in Australia. Looking at the land registry, other houses in the street sold for around 215 - 230k in 2018 -2019 depending on the modernisation etc. Thank you for your advice!

@seeingatadistance We were budgeting 30k for a kitchen, bathroom, redecoration and any furniture that we can afford with what's left over... might only buy us a kettle but we've got to start somewhere . I know it may not make any sense but we do not wish to live in my parents house till we are in our thirties. They came home pre COVID and could not get a flight back due to travel restrictions and it's now quite clear they (and us) need privacy and space. There are a few other reasons e.g. parents possibly thinking of retiring next year and coming home - therefore it's probably in our best interest to start looking if not buying before the end of the year. As I have said in a previous reply, we just don't want to be at a loss in 4/5/6 years or when the time comes that we are ready to buy DP's house. Who knows, DP's parents might have a change of heart and decide to stay in forever! Thanks for your advice.

@calialilly

I would not put another offer for this house because:
*You haven't done your research and you are ''poking in the dark''. I would download ''property log'' and ''property tracker'' (google extensions) which show price changes, current listings and dates of changes on the Rightmove. ''Property data'' extension will tell you live property market data on both Zoopla and Rightmove. You also should check average prices around the area you intend to buy (property market statistics) to give you an idea of reasonable offer.

*You say you will move in 4 years and if you will buy the house in question you will renovate spending at least 30k! Wouldn't it be more feasible to hold on to that money and additionally save 4 years worth ''rent free cash'' for a larger deposit?

*Banks are slowly removing 90-95% mortgages as house prices started to fall a little during pandemic. You do not want to gamble with having negative equity in 4 years time (as then you will not have equity at all to use it as deposit for the house you really want).

I would not buy now unless I was planning to stay in that house minimum 10 years.

@mrs2468 Yes, we know it was a cheeky offer but we were advised by our solicitor that there were no changes in the 2 years since they bought the property (except new flooring in the living room) so why should we offer any more than they paid?
The EA told us house was listed under the HR value as the sellers wanted a quick sale at the time they put the house on the market as they both planned to move to Australia over the summer.

Surely there is some middle ground between living with your parents forever and buying a house that needs £30 000 spent on it. Something like a small ten year old ‘new build’ that’s starting to look a bit shabby that you can spruce up for a few thousand.

You need to be careful that the in laws expensive house doesn’t become the focus of your lives. I wouldn’t necessarily want to make my financial decisions based on something that might never happen.

@LaughingDonkey Thank you for your advice, we will look into property data. I opened this thread as I was looking for advice as a first time buyer and I certainly do not wish to be 'poking in the dark'. Thankfully our loan % will not be that high.

You’d probably need to offer around 200k, if not more. I don’t think the EA are lying about two other offers - there’s a lot of people desperate to move now. I have two friends who have put in offers on properties they’ve only done a virtual tour of (also scotland).

I don’t think it really matters what they paid for it. It’s been valued at £205k and your should offer what you are happy to pay and be prepared to lose it if someone offers higher. Where in Scotland are you?

It depends where it is in Scotland. Where I live it's fairly unusual for anything to go below HR value and the property market moves very fast. Certainly in some places property prices have skyrocketed in the last 4 years so I can understand why they rejected you cheeky offer.

Also agents cannot lie about notes of interest - that illegal. It's perfectly possible that other people viewed it before lockdown or in the 24 hours since agents opened.
A house is worth what you're willing to pay for it and closing dates are generally only set when there are several notes of interest. Go in with your best and final and emphasise that as FTB you can move quickly.

@savoycabbage Thank you, we are most definitely keeping our options open as I think chances are slim that we will get this property when it goes to closing . Absolutely, they might change their minds and decide not to move anytime soon but DP's mum is adamant it is being kept in the family so who knows when they will give it up.

So as this is Scotland, you've already got the valuer's report which has said the house is worth 205K, and it's on for offers over £190K for a quick sale?

Honestly, if you want the house I'd offer what you think it is worth.

I wouldn't, personally, base my current house purchase or living arrangements on the possibility of buying a specific house in the future, especially if you don't know when (or if!) it will actually happen.

I don't think the EA is lying about other buyers either. As I said, if you want the house make an offer. What does your partner want to do, as you haven't mentioned that. Good luck with whatever you decide OP.

@AgentProvocateur Thank you for your reply. We are going to have a think re the price/speak to parents once more and see what's best to offer. P.s. that is really interesting re your friends putting offers in with virtual tours, wishing them all the best! I guess we may have been a bit naive!

@LoopyGremlin Yeah, thats the plan. We are only going to offer what we think its worth (to us) and we are definitely prepared to lose it. We are in a seaside town on the west coast

I'd be very surprised if the EA made up the other offers........they'd be no way they'd be setting a closing date if it was just you......
I'm assuming you've got mortgage provisionally ok'd?
If you want it surely you'd need it to start with a 2 from my experience of Scottish property buys!

@calialilly

:) No problem! I hope it really will help you. I was a first time buyer over a year ago and even with financial background, it took me long time to research and find all the info I needed.

Thankfully our loan % will not be that high

parents possibly thinking of retiring next year and coming home

You are in good position to hold off at least a year and save up even more and do extensive research.

no changes in the 2 years since they bought the property

House price is inflated not only because there were modifications/renovations - it has to do with with general inflation, bank lending conditions, economy, etc.

Research, research and research! Do not buy under pressure (your Dp or EA or family). Emotions cloud judgement!

If you really want that house, here's one of the guides on how to make a competitive offer

www.onthemarket.com/content/make-competitive-offer-first-time-buyer/

Happy googling

I don't get why you're intending to spend all this money doing up the property if you're only intending on living in it for a short time? It's clearly not in a bad state if the current owners haven't done anything to it.

We haven't done much to our property since we bought it over 4 years ago (garden aside), but it's risen in value by about £20k. House prices don't just rise by how much you've invested in the house, they'll be looking to make extra.

Go to closing date - the estate agent isn't allowed to lie about other interested parties - and put in an offer that's more than what you offered before. That's all you can do.