Is £25k over a ridiculous amount?

[LloydColeandtheCoconuts]

Hello,
Yet another thread talking about the awful time to buy! Sorry!
We sold our flat quite quickly and aimed to rent but impossible at the moment so we decided to go ahead and buy. We're at risk of our buyers pulling out as we had planned to be out by the end of July!
We've found a house in the area of our choice but it's tiny. It's well within budget and there is scope to extend into the roof. However it has just been put back on the market after someone pulled out due to the survey results. They had made an offer way over the asking price so the EA advised that the owner wouldn't be accepting the asking price but higher. We can afford to go over but not crazy because we plan to extend into the loft. We were thinking of going 10k over? Which I think is plenty. However we are considering £25k over, max, if we get into negotiations. I think £25k is a very substantial amount. If someone went £25k over your asking price you would be happy with that, right? Or would you push for more?

The last person made a high offer but something on the survey told them it wasn't worth buying at that price. Do you know what it was? This must reduce the sellers leverage to demand a high offer somewhat.

What were the issues bought up on the survey? I would offer what I thought it was worth and no more, taking in to account the issues on the previous survey. The seller can say no. Make sure when you price in the work to extend into the loft it will not take it to the ceiling price as you might struggle to make it back if you sold.

Are you buying the house because you want it or because you feel like you are running out of time?

Depends in the asking price. How much of a percentage is £10k over?
And as other pps have pointed out - whatever the survey said is not going away, so may be the sellers (and EA) need to temper their expectations..

Badgertastic
The property is a period Victorian one and the EA said that the issues raised on the survey were linked to the usual issues that come with that. He downplayed it but did say I would be welcome to read the report but I guess that's if the offer gets accepted.

MiddleClassProblem a bit of both really. It's a lovely house but tiny and there is definitely a sense of urgency at this point. We're relocating too so that adds to the stress. *

Livingintheclouds*
10k over works out as about 3% more if I've done my maths correctly.

I'd ask more probing questions about the survey - which bit in particular made the buyer pull out. You don't want to waste money (or time by the sounds of things) on having a survey done.

Estate agents have to tell you if they know material issues about the house.

Could be that the sellers got over excited at the above asking price offer and weren't willing to negotiate down, rather than there being a massive issue with the property, but better to know now.

Do you know how much the previous offer was? That would probably give you the best idea whether £10k over is too much or too little.
I would also check if extending into loft would definitely be allowed if you already find the place too small. All in all buying an unsuitable house costs much more than a few months of rent!

I'm speaking to the EA tomorrow so will definitely be more direct with questions about the survey.
Regarding the offer I asked how much it was but he said he wasn't at liberty to say.
The extension will definitely be allowed. The rest of the street have built into loft.

I'd agree with Callisto that buying the wrong house is more expensive than renting short term. Also I'd want to read the survey report before putting my offer in, as you need to take its contents into consideration.
One other thing is that while this is the only house ticking your boxes right now, and is already small, it won't be the only house which will come to market and once you are chain free you are a much more attractive buyer.
If you are relocating and don't know the area well it might be more useful to complete on the sale of your old place and rent in the new area to see which bits you might like to move into.

I would offer £5k over asking and let them come back with a counter-offer, unless you're very worried about it selling from under you.

When speaking to the EA tomorrow I’d try and go down the line of ‘I know you’re not at Liberty to say what the offer was but let’s be frank I don’t want to waste mine or your time so at least give me an idea’

The house buying system is much different in Scotland, we get to see a survey before we even view a property which is one thing I think we’ve got right at least. £25k over doesn’t seem absurd to me on a £300k house. Depends if that’s over asking or over value though. Remember you’re LTV will be affected if it’s above value.

We wanted to rent initially to get a feel for the place but we know the area and are aiming to buy as renting in the area is nigh on impossible! They're gone within hours on all the regular property sites. Also getting a 6 month tenancy just wasn't possible either.

Ideally we want a 3 bedroom house but the asking prices have been at the maximum end of our budget. This house ticks some, albeit not all, of the boxes.
I will be having that survey discussion with EA tomorrow and see if that helps with my offer decision.

If someone went 25k over my asking I'd be very worried about being downvalued at survey and also worried about buyers potentially dicking about, to reduce the price somehow and pulling out last min once something more worth the asking price comes onto market.

3% more is not a lot.

We went 50k over on a offers over 350 house and we were 5th highest bid and won because of our circumstances. (Highest bidder was 20k+ over our offer).

So it depends how much you want the house.

That aside (and this harshness is highly likely to be misdirected so please ignore if not applicable)...
If you are the sellers to my sister who was told they were moving out to rent; and so started conveyancing, spent money on brokers, searches, solicitors, and put their notice in on their flat and are now potentially homeless as of July unless they sign a contract for 12 months on rent (as they too cant get less than that) or spend extortionate amounts to live in a hotel in the hope you do sort your life out.

Well I don't know what to say to you. But I am sure karma will come around.

I've offered much more than 25K above the asking price (£250k) for a house we didn't eventually buy, but we reckoned it was undervalued. So did several others. We decided what it was worth to us, and gradually increased our offer to that ceiling. You need to decide what this house is worth to you, and then decide what you'll offer.

Would you need a mortgage valuation to proceed? The house we are trying to buy was valued at £25k under the sale price on the mortgage valuation