Offer accepted but think we are paying too much!

[RaybanRose]

First time buyers here, we saw a flat we loved and decided to put in an offer.

Listed on Rightmove at 'Offers over £200k' so we were advised to offer at £200k.
Seller declined and estate agent told us he was looking for £215k(!), and that he had previously refused offers around £205k.
We said we would go to £206k.
Estate agent said he had declined again but said he thought if we added one more thousand he would accept.
So we offered £207k and our offer was accepted.

But we are now worrying we are paying over the odds and that we jumped in too soon. We're worried we were too eager and they took advantage of that. The flat has been on the market for a while, listed on Rightmove as the price being reduced in June, though we don't know how much it was reduced from.

When we told our mortgage broker about the price he assumed there was a battle between us and another buyer which explained the 7k increase, but it was just us!

Nothing has been signed yet, we have literally only just had the offer accepted so we aren't tied into anything and it is still fully listed on Rightmove.

What are our options? What would you do in this situation? How do we find out if we are paying too much before we get too far in?

Any advice you could offer would be greatfully received. We have our second viewing tomorrow. Thank you x

As pp said it's worth whatever you want to pay for it. Don't go thinking the seller is going to be reasonable, their motivation may well be to make as much profit as possible rather than sell quickly or soon..!

We viewed a house on for 250k, similar in area had sold for 200-225k. The seller then rejected our offer of 240k (desirable area). It had been on the market for 18m. The estate agent was apologetic.. seemed like the seller had 250k in his head and wouldn't budge, end of story. He owned multiple properties and clearly didn't need the money!

The Estate Agent won't, or shouldn't, give you details about other offers. That is the vendors' private business. If you think you have offered too much then you should withdraw as the vendor isn't going to want to negotiate further.

There’s no point in talking to an estate agent and seeking reassurance that you’re not overpaying — it’s worth what you’re prepared to pay. You’re only overpaying if it’s not worth that to you. If it isn’t, walk away before you start incurring costs, rather than hyperventilating and trying to retrospectively haggle.

We put our house on the market in May at ‘offers over’, and on the first day of viewings had an offer of £30 k over which we accepted. It was presumably worth it to them, and while we could almost certainly have sold it for more, we wanted a quick sale, so it suited us both.

Have a good look tomorrow. If you've any doubts take a day or two to think it over.

Thanks everyone I appreciate the replies. We don't have many people to ask advice on these things so we do feel a bit lost at what is right to do

I think we felt ok about everything and just looking forward to the 2nd viewing tomorrow, and then our mortgage advisors reaction this evening has taken us aback slightly so we have now spent the rest of the evening going over all the things I've mentioned in my pp and convincing ourselves something is wrong. I'm sure it will be all fine and we'll just see how it goes tomorrow

If you’re in England you can pull out up to the point of exchange. You will lose any solicitors fees due to date and so will your seller. Pulling out this early won’t cause any great loss to anyone

Our house was offers over 300. We secured it at 315 - the owners needed that to fund their purchase. This was many years ago.

Offers over means it gets a wider pool of people looking at it on internet searches and as pps have said, common practice in Scotland.

In the grand scheme of things if you really want the flat 7k isn't much.

@Twiglets1 flats are simply not selling at the moment, anywhere. There is no value that it used to be in them, because of a very little demand. And the red flags are all over the place, even developers can't sell theirs whilst they have HTB and this 95% thing now. So it is correct to assume that majority of the flats are overpriced right now. Also the fact that seller deleted old listings, no history etc. just sounds bad. And so obvious that things aren't right. OP is FTB and if they are after the flat, now is their best time to buy from desperate sellers in order to secure the best price. Rather from someone who even dares to ask for offers over for a flat

People usually do their 2nd viewing before they offer not after. They offer when they are sure.

Make sure it doesn’t come across in what you say that you are still considering it all. As a seller, I’d be outraged if I’d taken a property off the market and was missing other possible buyers, for someone who hadn’t committed to the idea.

Or is it that it hasn’t been taken off the market and is still being shown?

As part of an offer, it’s usual to say that you want the property removed from marketing and viewings. Otherwise, you risk it being shown to others and a higher offer being accepted.

Often in a busy market, EAs won’t stop marketing or even showing until the Memo of Sale is produced. This is after they have seen evidence of your deposit funds, mortgage in principle and got the solicitor details. At this point (often takes about a week or can be quicker if you get the required paperwork in) the offer is on paper and they will remove from marketing or mark as SSTC.

So just be aware, that this property might not be fully off the market. If you make any noises about being unsure, they might well keep marketing it hard and advise the vendor to consider other offers. They might consider other offers anyway.

So you need to become sure one way or the other. Property buying is always a compromise and you won’t get everything you’d love, but the Flat can still be a suitable buy at the price that’s right for you.

If you want to buy it, get the paperwork in quickly to avoid losing the property. That first week after an offer is a vulnerable time,esepcailly in a hot market. So you need to be aware of all this, and not just thinking you might have overpaid and have the luxury to do lots of visits whilst you ponder your decision.

OP could look into land registry what originally the seller paid for the flat to have a bit of an idea how much profit he is trying to make. I think scaremongering and FOMO again will drive thousands of FTBs into negative equity.

The seller has lived in the property for 20 years+ so he is making quite a profit on what he paid back then as you can imagine

Wandergirl, it seems simplistic to say flats are not selling anywhere and all prices are too high.

Flats are still selling. Some have multiple offers and offers above asking price.

Not all flats are over priced, because many sellers have an accurate assessment of the market and price accordingly. Lots might be over priced and need to be reduced, but there are flats which are snapped up quickly when they come onto the market and are clearly priced appropriately.

But research is king isn’t it. Really should be done before offering. But lots of digging about online and looking at sold prices and tracking whether local prices for similar are being reduced, helps you gauge the market and what is the right price range. And then usually, I’d say, having a price range is a good thing. A little flexibility of what you will pay for a particular flat is good, unless there are multiple identical ones available. If there aren’t, if you have a £5k or £10k range, you might be lucky and get it for the lower price, but you can still get it if it can’t be had for the lower price. With these kind of ranges, as long as you plan to stay for several years, the market has time to absorb it, and 5 years later, £5k won’t seem like much….and if it’s a property you love, there aren’t lots identical and you can afford it, it’s worth paying it rather than losing it for. It’s different if you’re talking about differences of over £10k for a £200k property, but for a couple of £k it’s worth sucking up, if that’s what it takes as long as you can afford it.

Yes, mortgage lenders can down value, it happens quite a lot at the time. All you can do is to be fully aware of the lcoal market as far as possible and make sensible offers. Making daft offers not based on proper knowledge of the market or on a whim or due to excitement doesn’t end well usually.

As an example, I made an asking price offer for my first flat. It felt a huge sum of money. Three days later, the seller to,d me via EA they had another offer for £2k more and if I couldn’t match it, they would go with other buyer.

I was furious. £2k was a lot of money for me and I felt there was a principle at stake and I should walk away. I nearly did, but my parents told me to suck it up. Even 6 months later, prices had risen and I couldn’t afford the same flat and £2k seemed nothing. Even if prices hadn’t risen or had fallen, by 6 years later when I sold, £2k felt like nothing. If you can afford it, sweating a couple of £k isn’t worth it.

I’ve known countless people who regret losing a property over small sums…often due to fury at people asking for more or feeling they were being gazumpped and wouldn’t put up with it. Sometimes if you want something, it is worth paying a bit more than you’d really like to. But the key is to know the local market.

I am sorry, but I have to disagree. From where I live in London which is quite desirable area in 1 mile radius there are 1400 flats on sale right now and 200 houses. And it is just around me, across the board there are so much more. The balance is so off everywhere, because all ex-FTBs want to sell on and buy houses. Whilst a lot of new FTBs are now buying houses instead of flats or buying completely brand new ones, there is plenty of those too. Just by seeing these statistics I would be extremely cautions of the price I am willing to pay for a flat right now.

In 2007 peak even house owners went into negative equity which many didn't recover from up until now, some didn't recover at all. Had to start their savings again. Imagine FTB thinking they are going to jump on property ladder now and then 5 years later not being able to sell it on without a loss or coming out with a 0.

You are way over thinking this. You were happy to pay 200k, 7k more over the length of the mortgage (20-30 years I’m guessing if you’re first time buyers) is nothing.

And I would love to see examples of the flats with multiple offers being snapped up right now. I am sure there isn't many. Unless very very reasonably priced.

When the survey comes back you can renegotiate the price.

If it says xyz needs doing the cost can be reduced to reflect the cost of any repairs or the seller can pay for the repairs themselves. Either way this is the time to pull out if you are not happy with the searches or survey. Could be over a mine shaft for all you know.

@cabbageking

When the survey comes back you can renegotiate the price.

If it says xyz needs doing the cost can be reduced to reflect the cost of any repairs or the seller can pay for the repairs themselves. Either way this is the time to pull out if you are not happy with the searches or survey. Could be over a mine shaft for all you know.

Or the seller can tell you to sod off and refuse any reduction. Just be aware of that, they likely had a figure in mind that they needed for an onward purchase.

@Wanderergirl

And I would love to see examples of the flats with multiple offers being snapped up right now. I am sure there isn't many. Unless very very reasonably priced.

Sold my flat a year ago within days in london with almost 20% over asking price, 12 offers. Mortgage Valuation came back much lower than the sold price.

@RaybanRose as you are purchasing a flat, there are specific things to check before you commit to paying out for things like valuations, solicitors fees etc. Firstly is is leasehold or a share of the freehold? If it is LH you’ll need to ensure you have more than 72 y left on the lease otherwise a mortgage will not be possible but even then an extension maybe required. Secondly, what is the cost of the service charge and ground rents? When do they increase? (Ground rents tend to double every 10 years but this can vary) Is the vendor up to date with his share? (your solicitors will confirm this before exchange but worth asking now) How is the service charge operated? Is there a limited co between the leaseholders or is a management company involved? (Beware that management companies are likely to increase annual charges) Have any section 20 improvements been notified? (These are works that you’ll be liable to pay for even if the vendor has agreed to them) such as window replacements/fire doors/cladding/roof repairs/decoration to the exterior or common areas etc. Once you have the answer to these questions, you’ll be clearer as to whether or not £207k is the right offer for you.

As a FTB this can all seem overwhelming but you are in a strong position given you’ll have no chain etc. Plus you’ll also have no stamp duty to pay. So keep calm, keep asking questions here and take your time to feel comfortable before committing to expenses such as solicitors fees etc. Ask locally for recommendations for conveyancing solicitors (you don’t have to use the EA’s preferred referrals) As other pp’s have said, a property is only worth what someone is prepared to pay and a mortgage valuation agrees with. It doesn’t sound way out of line providing there aren’t any hidden section 20 liabilities and the ground rent doesn’t double every 5 years etc. Good luck to you both.

@Wanderergirl you are free to disagree if you want but you can't use a bold statement like "you are overpaying" and expect to be right every time. Just because lots of flats are overpriced, that doesn't mean that the flat OP has offered on is overpriced. The evidence she states is that it has already been reduced in price and the vendor has already turned down 206k. Therefore, if she now reduces her offer back down to 205 (which is bad form anyway) she will likely offend the vendor and the flat will be put back on the market and eventually sold to someone else, when it is clearly the best one she has seen in that area/price bracket.

If she feels worried about having offered more than she can afford, that is a separate issue, but to me this is just FTB nerves. She could regret it if she pulls out now as in reality, it's impossible for any of us to say if we have overpaid as it's always possible a vendor would have accepted a small amount less than we offered. But in her case, she offered 1k less and it was unacceptable so again, I don't see the issue. There is no "fixed price" it is all a matter of negotiation and comparing properties to other ones you have researched or viewed.

Nobody knows if you've over paid or not.
7K over isn't a lot in today's market - properties are going for 100,000s more here in the countryside.
I would stop fretting. You've got your house. It's been on the market for a while because he didn't get a price he wanted. If you'd offered less he'd not have sold, obviously wasn'st in a hurry.

Flats in our block sell very quickly - they are snapped up by investors who laminate the floors, white-paint the walls and rent out within a couple of weeks. Out of 20 flats, only 4 are now owner occupied. There will always be a demand for flats at the cheaper end of the market for renters and those wanting to downsize to release equity.

Our current purchase was on at 360K, we offered that and finally agreed at 365K. Our house went to 275 when marketed at offers over 270.

I think it was a negotiation and you paid what was needed to secure it. There is a lot to be said for being a reasonable buyer which will make everything move easier. You have a long road ahead of working with the seller. I wouldn't second guess yourselves. Be authoritative and stick to your decisions.