Buyers who offer more than they can actually pay

[WeBuiltThisBuffetOnSausageRoll]

After being messed around for months by a timewaster extraordinaire, we said enough was enough and put the house back on the market. Although our 'buyer' cost us a lot of money, the market has of course risen quite a bit in recent months, so that mitigates a lot of it.

We had quite a bit of interest, resulting in several offers - two of which were strong and realistic (not quite the highest), and we've since accepted one, who seems very serious, very keen and isn't hanging around, which is perfect for us!

However, some of the offers we received were from people who clearly did not have the funds available to pay the price they offered, had we accepted it, with their totals of deposits and agreed lending falling short by some way - by £10-15K. Added to this, the property needs work and modernisation, which was made very clear to them (and they would have seen when viewing), which makes it even more puzzling.

Is this normal? What's their game - does anybody know? Are they just hoping that they'll find another £15K down the back of the sofa, be able to twist the lender's arm, tap a family member (for what obviously has to be declared a gift and not a loan), eye-watering credit card cash advances?

I may be being unfair here, but I rather suspect that some of them see their initial task as making the highest offer, so as to exclude the competition and get their foot in the door, but never for one moment expecting to honour that offer.

Whether they're:
Over-optimistic and/or not very good with maths;
Counting on finding something to blame ('requiring' a significant reduction);
Thinking (or planning to gaslight) that the lender's valuation is THE only actual market price (irrespective of competition from would-be buyers in a seller's market), which automatically overrides anybody's offers;
Planning to let things progress a long way before springing 'an issue that has arisen' on you - or just to keep quiet and gazump the day before exchanging contracts (even in a rising seller's market)?

Why do they do this? Do they tend to somehow succeed or just end up wasting everybody's time and money (including their own)? Have you been the buyer in this scenario and how did it all work out for you? What are the worst horrors of this kind that you've experienced - as a seller, estate agent, observer or other?!

To clarify, this is a deceased family member's home that we're selling - not our own home.

They might be hoping it down values further down the line, or if they are completely in love with the house they might go to the bank of mum and dad for the difference.

When we last bought our budget was x and we ended up buying a house for 12k more in the end once we had practically sold our kidneys

When we last bought our budget was x and we ended up buying a house for 12k more in the end once we had practically sold our kidneys

Glad it worked out for you in the end, but did the buyer/EA not query your position in the first place? It must be highly frustrating for an honest buyer who is willing to do whatever it takes to make up the difference; but to a seller, it doesn't look especially promising at the outset - and you have no way of knowing if the buyer will bust a gut and make whatever sacrifices/hard decisions as necessary or simply spring it on you down the line, shrug and expect you to take the loss.

I would certainly be very careful with such offers! I’d even be careful with offers that are to the max of peoples affordability right now.

Ahhhhh, you are speaking to my soul.

I am coming from the position of earnest buyer - we have (for almost a year now) offered on a property with the honest amount we can afford and feel the property is worth. We have offered this amount based on the property needing work and regardless of what a survey may show. We have always offered the amount saying this.

Naturally the vendor has felt our offer is not high enough and has THREE times accepted offers (6% higher than ours) over the course of the year and had it fallen through three times. In much of the ways you describe. First buyer trying to negotiate after a survey, second buyer pretending to be a cash buyer but not being able to product funds. Now the third buyer taking the best part of a month to show proof of funds.

Meanwhile, mortgage rates have risen energy prices soared! So very annoying. A waste of time for everyone.

I do think vendors going for the highest offer are part of the problem too. But then I would say that 😂

For a few properties we've had to be 'financially vetted' when offering so the vendors could decide on who truly was the most proceedable and accept on this basis. Thought it was quite strange at first but it does make sense. Especially at they wanted a very quick sale.We lost out both times unfortunately. Even though we are extremely serious and very proceedable, people really are offering way over asking that it's just setting unattainable levels. Will be interesting to see how many houses are put back on the market though.

With the current situation of more buyers than properties available I can see that this might be happening more. It is always irritating when buyers view your house knowing it's above their budget and are hoping to knock the price down before they've even seen it! Even for houses that are marketed as requiring updating/modernisation they are already priced with that work in mind.

I've always bought houses that require some updating and/or modernisation. The surveys can show a few issues but we get estimates and then if the work really does need doing a small reduction (not 15k worth!) might be necessary. I will say that we've had estimates on issues raised in surveys that did NOT need doing in the opinion of the professional we got round to quote. The only issue that qualified for a mortgage retention was the electrics in one property, and because of the loan ratio they didn't even make a retention - we just had to get the work done within a certain time and send them the certificate afterwards.

First buyer trying to negotiate after a survey, second buyer pretending to be a cash buyer but not being able to product funds. Now the third buyer taking the best part of a month to show proof of funds.

Yes, it's amazing how many buyers seem to need weeks or even months to be able to show a bank statement. Our first 'buyer' went from being a potential cash buyer but 'preferring to get a 30% mortgage to free up funds' - and actually showing proof of the 70% or so deposit - to be scrabbling around desperately, constantly stalling and unable to come up with proof of having even a 10% deposit, never bothering to explain what happened to his original deposit, which was one very main reason why we chose him in the first place.

We can only assume that he either bought somewhere else in the meantime or possibly had money borrowed from and/or owed to somebody else 'resting in his account' that he deceitfully/fraudulently claimed was his own available funds.

I agree with you that vendors need to be realistic as well and not expect to receive the moon on a stick, just because somebody has promised it to them with no evidence of even having a stick, let alone owning the moon!!

It is always irritating when buyers view your house knowing it's above their budget and are hoping to knock the price down before they've even seen it!

Oh, yes, but at least it only wastes a relatively small amount of time when they come straight in with a derisory offer and/or nowhere near a position to start proceeding. It would still help everybody much more, though, if they focused on properties in their actual price range - especially in a sellers' market.

If I was selling, I would expect, and insist the EA checked that anyone whose offer I was considering was proceedable. I’d expect them to evidence their deposit to the EA along with evidence of a mortgage in principle, having their own buyer if relevant and solicitor details.

In a hot market, buyers can expect to provide these before an offer is accepted. Otherwise, I’d expect to accept an offer subject to seeing those things. It would not be removed from websites ir marked as SSTC until those things had been seen and Memo if Sale prepared.

Of course, their finances can still turn out to be dodgy. But insisting on checking by EA at start will mitigate some of this. They can still try to reduce offer etc, but at least you can ascertain if they actually can afford what they offered. Knowing they will have to evidence it also discourages people from making time wasting offers they can’t afford as they know they won’t be able to evidence them.

As a buyer, be ready with the paperwork. If you’re really keen, have packs of it ready and drop them round to the EA when making an offer or email electronic versions of the pack. It can make you seem a more sensible prospect and stand out from the others offering.

@WeBuiltThisBuffetOnSausageRoll luckily for us the vendor wasn't in a rush, they really liked us, we had a big reason for buying this particular type of house, and had lost out on buying a neighbouring one quite late in the process that wasn't our fault, which they knew, so all the stars lined up for us. That was many years ago and not in these mad times, i will add.

Bonus
Inheritance
Selling a car
Child graduating from university

So many reasons

Seems to cut both ways. My mate offered and was accepted on a house two weeks ago. Proof of funds provided 2 days later. Last week, the vendor's demanded an additional £5k because they apparently "hadn't understood"her offer - £200,500 and though it was £205,000. She was already the highest offer they'd had. I dread to think what additional stunts they'd have pulled if she'd stayed in the chain.

Around here, where many houses sell in 24 hours, the EAs won't put your offer forward unless you've proved you're able to proceed at the value of the offer. It's a bit annoying as buyer as they know if you're offering at the top of your budget or not but if I was selling again I'd be grateful.

Bonus
Inheritance
Selling a car
Child graduating from university

So many reasons

The first three are all valid reasons as to where your deposit may have come from - although the last would surely just reduce your regular outgoings rather than provide you with an instantly higher deposit, and then possibly increase your agreed loan amount (if you satisfy the bank's requirements), thus meaning that you aren't in the position that I'm talking about?

If you're about to make an offer on a house based on having the funds from the above, you need to have the funds already (or imminently). It's no good offering on a house in July on the strength of an expected Christmas bonus or based on the fact that your parents are 104!

There's nothing wrong with saying at the outset "I will offer you £XXX, but I would not be in a position to move forward for at least 6 months" and then leave it up to the vendor to take it, leave it, or contact you down the line if another sale falls through, to see if you're still interested. What you can't do is to make an offer with the implication that you're ready to proceed when you're nowhere near, have the vendor turn down everybody else and then leave them hanging indefinitely.

Seems to cut both ways. My mate offered and was accepted on a house two weeks ago. Proof of funds provided 2 days later. Last week, the vendor's demanded an additional £5k because they apparently "hadn't understood"her offer - £200,500 and though it was £205,000. She was already the highest offer they'd had. I dread to think what additional stunts they'd have pulled if she'd stayed in the chain.

That's just as disgraceful. neither sellers nor buyers as a group have the monopoly on honourable or dishonourable behaviour.

When we bought our house (nearly 20 years ago now), we tried to be honest by offering the asking price, as we really liked the house, thought that was a fair price and didn't want to mess the vendor around. The intent was clearly not mutual, as the vendor saw this as a sign of our wealth and/or gullibility and an excuse to suddenly claim that the EA had made a mistake - in their particulars that THEY, the vendors, had checked and signed off - and that the actual price was £4K more. They also offered us the 'opportunity' to give them an extra £3K to buy the nasty stinking threadbare scraps of carpet, which we politely declined (they left them for us to get rid anyway of in the end).

When we later negotiated on genuine grounds, following the survey, we ended up actually paying £2K less than we'd originally offered. He was furious about it and said he was going to tell the vendor of the house that they were buying that they would need to reduce the price and make up the difference.

We understood that they wouldn't have been unable to proceed with the shortfall - they were actually downsizing - he was just entitled and didn't care who lost out (for his substandard house) as long as it wasn't him.

@Outnumbered99

Ah, that sounds like a dream scenario, then! It's a shame that more house sales can't go through as honourably as that, but with so many liars and dishonest chancers around (both buyers and sellers), unfortunately, you never know what tricks even apparently lovely people might try to pull at the last minute, and it makes everybody naturally wary and untrusting.

Well, I'm very grateful that you can have an offer accepted without having all your paperwork in place. Because when a perfect house came on the market last week, we weren't prepared, but our offer has been accepted.
Yes, we've been scrambling round to get everything else sorted and prove we can do what we said we could do (and maybe the difference is we can actually do what we said) but we had absolutely no proof when we put in the offer. We googled solicitors and surveyors after our offer was accepted by the vendors!
Less than a week from the property going on rightmove, we have viewed, offered, been accepted, sorted solicitor, surveyor, proof of funds...
If you bust a gut for the right house, it can be done.

An agent I spoke to said they were discouraging excessive offers because they often fell through because people couldn't get finance or houses were downvalued. So I offered 10% over the "offers over" price and was outbid by someone who offered "considerably over" what I did . I can only assume they were downsizing and had cash to splash.

It seems to be standard for the more desirable houses to go to best and final offers within a few days here. The crap stuff is languishing for longer.

I reckon people just try their luck and think they'll 'make it work somehow' if they succeed. I think they are more dumb then calculating.

Although I can also believe some will try and nitpick the survey and lower their offer but I wonder if they truly plan that at the outset.

Our EA was actually really good at doing due diligence on all our offers when we sold last year. Sale went to best and final offers and we rejected the highest two because the finances sounded shaky (tiny deposit so dependent on very high LTV mortgage) .

@WeBuiltThisBuffetOnSausageRoll the pain is real! The vendors just threw the towel in on my house purchase- after failing to secure a mortgage for their onward purchase. I'd been waiting for their elusive mortgage offer for 5 months, as had the people they were buying from! Why on earth do people make silly offers and start this process with no idea whether they can even move?! Mind boggling.

I haven't bought for years but we had to have the MIP for offer.

When we last sold in 2017 the EA claimed that they vetted every buyer before allowing them to view.

To be fair, they did cancel one viewing on the day because they had done the checks and the buyer couldn't afford anywhere near the asking price, but we also accepted an offer from someone who, it turned out, couldn't come up with the money.

We fired the EA. New agent sold it successfully within 48 hours.

@WeBuiltThisBuffetOnSausageRoll

There's nothing wrong with saying at the outset "I will offer you £XXX, but I would not be in a position to move forward for at least 6 months"

I so agree! The first buyers of the property had their offer entertained for 5 months and hadn’t even got to the survey part! Really annoyed my husband and I. We wondered if we should bullshit it too ‘to get the foot in the door’. Except we would never do that and turns out this vendor definitely won’t be pushed into dropping their sale price by any of these chancers.

I mean, the property is overpriced, hence being on for almost a year now, but have to give it to the owner for being stubborn enough to not acquiesce to the the gazundering tactics. They don’t need to sell, that’s why they can afford that position. I guess you’re the same as it’s not your own home!