Houses selling for way over asking price

[Exasperatedhousehunter]

I am trying to buy somewhere at the moment in a city that has seen ridiculous price increases and limited stock. However, the problem is not so much the prices as the fact that properties seem to be selling for way over the asking price. I have only bid on a couple so far but both times my own offer was over the asking price (not by a huge amount but a bit) yet I was told that there were others that were significantly over so obviously the sellers went with them. It's pretty frustrating because, as someone who will have a mortgage, I can't be offering massive amounts over because the bank will just refuse to lend much if they think it's overvalued. And I don't really fancy paying way over the odds for something (these are fairly modest properties I am looking at).

The other thing is that when I look at the actual sold prices for the roads I am looking at, these seem much more realistic and in line with what the house was valued at (on Zoopla, the original listing is stored so you can see what it was on for). Even ones from 2021 (the most recent ones are around September). I've only seen one sold one that's 40k over original asking price. Some are 5k or so over, many are asking price. So what happens to these sky-high offers? Do they barter it down once they get the survey? Surely EAs would warn sellers that this might happen. Or is this thing a new thing so that if I look in a couple of months once the land registry records are updated, it will look really different?

Sorry for general moan but I am feeling really fed up at the moment and as if I will never find anywhere at this rate.

Do you live in Edinburgh?

Exactly the same in Manchester

no, Bristol! It seems like things are bad elsewhere too then... Just want it to calm down a little so there's at least an outside chance of getting something. I sold my last place at the absolute worst time too (mid 2019) and have been in rental for a bit, now living with family, which is not ideal. I remember thinking at the beginning of the pandemic how relieved I was that I had already sold because I thought prices would tank. How wrong I was but hindsight is a wonderful thing.

Maybe my fed upness is also due to there being very few properties come on the market in December. Hoping there will be more in January (although probably still lots willing to pay over asking, argh).

Aargh @Redshoeblueshoe sorry to hear that. I think sometimes us Southerners have some rose-tinted illusion that you can snap up wonderful properties in the North but it's clearly a myth .

Hoping it will ease off soon. Who are all these people with cash that they don't mind splashing? I'm looking at 2-bed terraces in modest areas so hardly luxury stuff and definitely not the sort of thing where I'd feel happy forking out 40k above its valuation for (and the bank would no doubt have something to say too ).

I saw a report in the news this week that you should reduce your house-hunting budget by 10-15% as this is what you now need to pay over asking price to secure something. Bonkers!

Bristol is fairly bad at the moment. My house sold for £50k over asking recently.

I managed to buy at a discount but only because I picked something that needed totally redoing

@cherrywhite

I saw a report in the news this week that you should reduce your house-hunting budget by 10-15% as this is what you now need to pay over asking price to secure something. Bonkers!

Wow that’s insane! But if the agents aren’t upping their valuations by that amount then clearly the properties aren’t worth the inflated prices and all it takes is for the market to slow down a bit over the next few years and you’re fucked if you need to sell and move again. The one thing I have going for me in the absence of fuckloads of cash is that I’m essentially in the position of an FTB although that doesn’t seem to be worth that much at the moment because presumably all the hugely over asking people are cash buyers…

Bleurgh. It’s hard to stay positive but I guess all extreme housing booms do eventually come to an end.

@Si1ver

Bristol is fairly bad at the moment. My house sold for £50k over asking recently.

I managed to buy at a discount but only because I picked something that needed totally redoing

Wow, massive congratulations on that sale! Yes I’m leaning towards doer-uppers now or something with a downstairs bathroom or something else that might put people off

Still mystified at the land registry sold prices because these indicate that the actual sale prices aren’t that high but I’d prefer to just be upfront from the beginning rather than offer loads and then try to drop it.

Fingers crossed for a more positive 2022.

Don't forget that sales that completed in September would have had price agreed in June.

Please don't think you can agree a price with the vendor and then reduce it just before exchange. That is a shitty way to behave and if it's a seller's market, you run the risk of them simply putting the house back on the market and you're left with nothing but solicitor and surveyor bills.

Also the same in London (at least some parts). I paid 10% over asking.

@Clymene

Don't forget that sales that completed in September would have had price agreed in June.

Please don't think you can agree a price with the vendor and then reduce it just before exchange. That is a shitty way to behave and if it's a seller's market, you run the risk of them simply putting the house back on the market and you're left with nothing but solicitor and surveyor bills.

Yes, that is true about the September sales although I would have thought the stamp duty holiday (which no longer exists) would have driven up demand even more at the time, yet the sold prices don't seem to suggest that they were higher than the original listing.

And I have no intention of doing what you suggest. I'm just wondering if that is what is happening or whether the sales are actually completing at way over asking. I couldn't even do that if I wanted (which I don't) because I'd be needing a mortgage so it would become obvious pretty quickly that I couldn't pay way over what it was worth.

I think this is just the way it is at the moment (and has been for 18+ months now). We have just exchanged finally after trying for nearly 2 years to have an offer accepted (our original purchase in early 2020 fell through as vendors pulled out due to fears about COVID and needing to shield). Every house we've offered on, we've offered 10-15% over guide price and not been successful.

The one we finally managed to have accepted was about 10% over. I don't know what the other offers were (there were 4), but I suspect we got it purely because the vendors liked us (they showed us around and spent some time with our dc) and they really wanted it to go to a young family, as they had lived there 40 years raising their own family (all other viewings in the time we were there were couples in their 60s/70s).

If you like a house and can afford it, I'd offer what you can afford and not worry too much about the valuation. If the lender under-values it, then you can re-negotiate, if necessary, or sellers can re-market. Our lender had no issue with the valuation. None of the house we (unsuccessfully) offered on have come back on the market either, so I assume there were no issues with their high offers either. Realistically, I think this is more than just a blip now and prices will probably stay high for awhile, so there is potentially less risk to the lenders than there might have been a year ago.

My part of London has seen higher asking prices but sold prices are under asking.

@ClaudiaWankleman

Also the same in London (at least some parts). I paid 10% over asking.

Sorry to hear. It seems that everywhere is affected. I will give it a couple of months I think and then reassess if I am still having no luck.

At least I'm not having to pay rent at the moment so that's one small silver lining I guess.

We want to move but waiting for the new year due to the income tax increase & possibly another rate rise.

@mindutopia

I think this is just the way it is at the moment (and has been for 18+ months now). We have just exchanged finally after trying for nearly 2 years to have an offer accepted (our original purchase in early 2020 fell through as vendors pulled out due to fears about COVID and needing to shield). Every house we've offered on, we've offered 10-15% over guide price and not been successful.

The one we finally managed to have accepted was about 10% over. I don't know what the other offers were (there were 4), but I suspect we got it purely because the vendors liked us (they showed us around and spent some time with our dc) and they really wanted it to go to a young family, as they had lived there 40 years raising their own family (all other viewings in the time we were there were couples in their 60s/70s).

If you like a house and can afford it, I'd offer what you can afford and not worry too much about the valuation. If the lender under-values it, then you can re-negotiate, if necessary, or sellers can re-market. Our lender had no issue with the valuation. None of the house we (unsuccessfully) offered on have come back on the market either, so I assume there were no issues with their high offers either. Realistically, I think this is more than just a blip now and prices will probably stay high for awhile, so there is potentially less risk to the lenders than there might have been a year ago.

Congratulations on exchanging! I do take on board what you say. Maybe I need to reassess my approach then but I wish this whole process was easier and more straightforward . So difficult to gauge what is the right level for offers too. Agents round here just ask for best and final up front so absolutely no chance of negotiations either.

I loathe the ones with a guide price too because it just seems to be code for encouraging ridiculous offers. I wonder if some of them might go on for a low price too just to generate interest in the knowledge that people will offer at least 10% over. I saw a couple earlier in the year that were on for 'fixed price'. If only... I don't know how they deal with multiple offers for those though.

@dundydee

We want to move but waiting for the new year due to the income tax increase & possibly another rate rise.

Seems sensible. I think that it's unsustainable the way it is at the moment and at some point it will end. I bought my first house in 2014 and the sellers had bought that in 2007 at the peak of the boom before the recession. They only sold it for 10k more than they'd paid 7 years earlier so that shows what can happen when property prices seem to be going crazy.

I'm hoping it's one of those things that will work out for the best in the end. Hopefully I am not being overly optimistic/unrealistic.

Exactly the same in my north west town, except even the asking prices are over inflated, and then the houses are going for at least 10% over that.

My boyfriend has been looking for a house for over a year. He offered 165 on a 130 house and still didn't get it!

This is the reason I’m going for new build this time

I'm also in Bristol and bought a house a couple of months ago. We must have done over 30 viewings and had multiple offers rejected (including offers over asking). We ended up buying a place that had been sat on the market for ages. We offered below asking and got it. The decor was pretty old fashioned and it needs a total revamp which is maybe why it didn't sell as quick.

Bristol is a total nightmare for property though so I have sympathy. My only advice is to keep at it and not get too depressed by all the rejections. And if there is anything that's been sitting on the market for a while then see if you can do a deal, the estate agent will be desperate to get rid.

Houseprices where I am have gone Bonkers. Hastings prices rose by 25% since January. Lots of people moving from London with money to spend.

Where I am there’s lots of Hong Kong money in the market that’s who the cash buyers are

In the past month I've seen 3 houses that we lost out on best and final offers earlier on this year come onto the rental market, so I guess the sky high offers that were accepted fell through. We are in SW London/Surrey borders. I've looked at the sold prices that are trickling onto Rightmove and a few of the houses we looked at (we looked at a lot!) actually sold a little under asking price, which is weird, as for at least 2 of them I remember we didn't put in offers as at the time the estate agent had told us there were already offers over asking price. All very odd.

That is weird about land registry not reflecting the apparent higher prices. I'd try and schmooze the agents a bit so they think of you when a place comes on the market. You have no chain, so that should be attractive to vendors.

Just the same in my city too OP. I think limited stock is the reason, totally a sellers market atm. Good luck with your search.