Offers over-advice needed

[PurpleIsTheColour]

Hi all,

We finally managed to find the house we want and it’s advertised as offers over £260K. For context, we are first time buyers with an AIP of £325K so the current house is below our budget so we can afford to go higher. However, we have no experience in house buying so please fellow MNs tell me what a reasonable first offer over 260K is?
We really like the house-it’s a 3 bed semi with a relatively recent kitchen extension and it’s in a nice area, so will be snapped pretty quickly IMO.
We viewed yesterday so I’m going to call the EA first thing tomorrow to give our offer. Is 275K too much for a starting offer? We don’t want to look desperate but we also don’t want to lose it if the seller doesn’t go for final and highest.

Any advice will be greatly appreciated

Impossible to tell without knowing your local market. Can you check what price neighbouring properties have gone for recently?

There’s a 3 bed detached 0.2 miles away that went for offers over 275K but I can’t tell how much over it got sold for. There are a couple of semis that went for 290K in a fairly similar condition to the one we like which makes me think this one will be sold for somewhere similar.
It’s just so difficult to predict …

Why don't you start at 270K. It is over without being really over. And you are in a good position as a first time buyer.

Where in the country are you? As I know in London for example properties tend to go for higher than asking whereas where I am (West Midlands) it would be unlikely a property would sell for over asking.

I so hate it when EA do this offers over. I have bought 3 houses this way and tend to go about £3000 over asking price per £100k. I got 2 out of the 3 that way. The third went way over asking price. You have a safety net as BS will appoint a valuer and in most cases they won't lend over price their valuer comes up with. In both cases I offered above and BS valuer valued it down as found something like damp and vendors adjusted price to BS valuer price.

Possibly £268,750.

I'd go in at 270,400 which is 4% over. Then you could move up to 5% over.

Make sure you stipulate everything you want - for example, "we are offering above asking price because we love the house, we're in a great position to move as first time buyers we are chain free. Our offer of 270,400 is to include [then list things you arent sure are included in price eg fitted curtains / cupboards / blinds /particular light fittings ]

How big is your deposit OP? If the house is worth 260k this is all the mortgage company will allow up to. Anything over that you would need to cover yourselves in cash.

I would ask the estate agent when you speak to them. They’re probably discussed with the client what their expectation is, especially given something similar sold recently. I’d expect them to want around that figure?

It really depends where you are. In scotland this is normal, and it’s a headache.
In my area, houses are going for 20% over the home report- so the home report on an offers only 260 would like be 290ish. So the house would probably go for about 340ish.
But I am in a v desirable area and it has gone a bit mad recently.

@kerosene20

How big is your deposit OP? If the house is worth 260k this is all the mortgage company will allow up to. Anything over that you would need to cover yourselves in cash.

This. Where I live, ftbs have been bidding over the asking price and then the sales fall through when the valuation comes in and the property isn't valued at the amount offered.

As has been said, none of us can tell you how much more (or even less) to offer, as it will depend entirely on the local market.

How much do you want the house? How long term would the move be? What sort of interest is the mortgage AIP locked in at? So many variables atm. More of a levelling off than growth in the market predicted for ‘22. If it’s the right home for you long term, invest. Good luck OP.

Thanks for all the responses-so much to think about tonight
We have 30K for deposit so that would be 10% of the current house. We are in Cambridgeshire, lots of houses coming up but hardly any we like (maybe it’s normal as we’ve only been looking for a month).
One of my exact worries is that we will bid high and the valuation will show the house is not worth so much money and we’ll lose it. I’ll have a look on rightmove again tonight and will go with 270K for a start and see how it goes from there…

See what is coming onto rightmove where you are...I'm NW and since Christmas lots of properties are now coming back on as reduced....so market definitely slowing here....my friend just had an offer accepted for 290 on a house that was up for 295 .... so.maybe the days of way over asking price offers are over

You’ve said that you could offer £275 and then increase it, I would double check that to make sure it’s not best and final.

Really depends on area. We sold our house in November at offers over £x amount and the only offer we got was for exactly £x amount and not a penny more!

Make sure you know what other similar properties are on at and if it's possible to find out their selling price that'll help.

I think if you like it, I would go in at £275K and emphasise your position. Around here, offers over has been 10-15% over, at least. We offered significantly more than the offers over price on the property we finally had an offer accepted on (after 2 years of trying to buy!). No idea what the other offers were (there were 4), but very happy with the decision and the bit extra has been money very well spent as the market is tricky here.